Insurers at Lloyd’s of London have launched a product to cover companies for losses caused by malfunctioning artificial intelligence tools, as the sector aims to profit from concerns about the risk of costly hallucinations and errors by chatbots.
The policies developed by Armilla, a start-up backed by Y Combinator, will cover the cost of court claims against a company if it is sued by a customer or another third party who has suffered harm because of an AI tool underperforming.
The insurance will be underwritten by several Lloyd’s insurers and will cover costs such as damages payouts and legal fees.
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