How Is Artificial Intelligence Insured?

A mismatch exists between rapid enterprise adoption of artificial intelligence (AI) and the fragmented market for insuring AI-related losses. This report examines AI incidents, U.S. lawsuits, enacted state laws, and insurance filings to assess how insurers are responding through exclusions, endorsements, affirmative coverage, or silence.

The Insurability of Artificial Intelligence

Sasha Romanosky, Celine Robinson

Businesses increasingly embed artificial intelligence (AI) in operations, products, and services, creating both new opportunities and new forms of risk. Firms are deploying AI in customer service, employment screening, coding, fraud detection, and autonomous systems. At the same time, AI-related harms are already emerging, including incorrect or misleading outputs, deepfakes, privacy violations, intellectual property disputes, fraud, product defects, and discriminatory decisions. These harms create demand for insurance but do not fit neatly within existing insurance lines.

In this report, the authors examine AI incidents, U.S. lawsuits, enacted state laws, and admitted-market insurance filings to assess how insurers are responding through exclusions, endorsements, affirmative coverage, or silence. Key findings include the dominance of misinformation incidents, concentration of litigation around intellectual property, and five mechanisms through which AI could generate accumulation losses across insurance lines.

This work was conducted within the RAND Institute for Civil Justice and the RAND Feinberg Center for Catastrophic Risk Management and Compensation.

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