The Evolving Landscape of AI Insurance: Empirical Insights into Risks and Policy Gaps

• Pages: 18-27
• Date: 01 October 2025
• Published date: 01 October 2025
• Author: Anat Lior
• Subject Matter: Derecho Público y Administrativo

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The Evolving Landscape

of AI Insurance: Empirical

Insights into Risks and

Policy Gaps By Anat Lior

The rapid integ ration of ar tif‌icia l intell igence (AI )

into both per sonal and com mercial s pheres is

profoundly re shaping the c urrent r isk land scape,

presentin g unprecedented ch alleng es and oppor tunit ies

for the insur ance indust ry.1 As an essent ial mecha nism in

modern societ y, insura nce plays a pivota l role in support ing

innovation wh ile simu ltaneousl y ensuri ng that tho se who

inevitabl y suer har m are compens ated.2 Th is art icle

delves into the empi rical i nsight s from the in surance se ctor

regard ing liabi lity pol icies coveri ng AI ri sks, add ressing

crucia l questions ab out the need for specia lized A I insur -

ance, the adequa cy of exist ing polic ies, and the role of

legisla tion. Underst anding t hese dyna mics is pa ramount

as the lega l and actu aria l realm s converge to navi gate the

complexities of A I liabi lity.

The f‌indin gs reveal a d ynam ically e volving in surance

market where und erwr iters, brokers, and AI user s acknowl-

edge a deep conne ction betwee n anticipate d AI regu lation,

signi f‌icant f‌ina ncial penalties, a nd the emergence of a n

AI-speci f‌ic insurance sector. Brid ging the gap between leg al

theory an d actuar ial practice is cr itical, a s new AI regu lations

and litig ation are poised to create a di stinct i nsuranc e market

for AI. This a rticle will focu s on the most sign if‌icant insights

about (1) AI-specif‌ic pol icies, (2) the conc ept of “silent AI”

and the para llels to cyber insur ance, and (3) the applicabilit y

and lim itations of t raditional liabi lity policies in the A I age.

The Evolving AI Insurance Market: A Pivotal Role

in Risk Management

Insura nce is ubiquitous a nd omnipres ent in our societ y, from

personal he alth and automo bile coverage to com mercial

malprac tice and gener al liabi lity pol icies. The inc reasin g

usage of AI , partic ularly g enerative A I (GenAI), is pre dicted

to signi f‌icantly a lter the existing r isk lands cape, mak ing

liabil ity ins urance a va luable tool for man agin g future r isks.

Casualt ies, lia bility, and prop erty h arm are se en as unavoid-

able as AI inc reasing ly integrates into d aily l ife and the

commercia l market, po sing a un ique challen ge for insur ers

who must adapt thei r oerin gs to these u ncerta in risk s and

their unavoid able harm s.

AI is often pe rceived as present ing what the insura nce

industr y terms “black swan” or “gre y swan” events. Bla ck

swan events ar e “sudden shocks th at could not have been

foreseen or predic ted,”3 such as mass ive cyberat tacks or the

COVID-19 pandemic. Grey s wan events, on t he other hand,

are “predict able but unl ikely surp rises,” like t he 2007–200 8

f‌inanci al cri sis, often i nvolving a kn owledge gap or bia ses

that lead ind ividuals to ignore pote ntial bad out comes.4 AI