AI Governance Takes Center Stage in Insurance Policy Renewals

Chair of Olshan’s Insurance Coverage Law Practice Anthony Crawford authored an article in New York Law Journal’s “Expert Opinion” column entitled “AI Governance Takes Center Stage in Insurance Policy Renewals.” In the article, Anthony explains how policyholders can prepare for increased insurer scrutiny of artificial intelligence use during insurance renewals. His guidance helps risk managers and general counsel document governance, assess coverage gaps and negotiate insurance terms that reflect manageable AI risk. “Policyholders should approach their insurance program renewals in the systematic manners they have taken in the past: having a sound understanding of the risks they face, including AI risks; having documented governance and risk management protocols in place; and understanding what insurance companies expect in the evolving market,” Anthony writes. He advises organizations to prepare disclosures surrounding data use, privacy controls, human oversight, audit trails and vendor management. Documented controls can help policyholders demonstrate that AI exposure is measurable, support requests to narrow exclusions and pursue affirmative coverage where available. “Using governance controls can serve to reduce an organization’s risk profile and thus make the organization a better risk to insure,” Anthony explains. “Simply put, companies with good governance are better risks than those without, and the insurance market will respond accordingly.”