GILC's VIEW: On the impact of AI on claims

Growing consumerism, the globalisation of supply chains, the emergence of new technologies and the need to innovate are driving an increase in product liability claims around the world. In particular, electronics, software and digital devices are now subject to a wider range of claims, including those involving cyber security and data privacy.

The emergence of new technological platforms and tools, such as artificial intelligence and their increasing integration into daily life – both at home and at work – has presented issues for legislators and regulators alike.

Despite the recent spike in interest in AI, this exciting sphere is still poorly understood; and, although technology and data protection legislation is becoming more common globally, regulations that are specific to AI are still a work in progress.

Given how quickly AI technologies have become commonplace, product liability concerns for the companies that make and sell AI-powered technology seem likely to arise in the very near future.

The scope of claims in many industries, not least in the technology-driven sectors, can be expected to increase considerably as a result of the proposed changes to the European Union’s Product Liability Directive. The directive, as it currently stands, imposes effectively strict liability on manufacturers for defective products that cause physical harm to consumers.

However, due to complex nature of AI and the blurring of lines between products and services, its role has been a challenge to establish. If the EU directive is passed, it would ensure the definition of AI as a product that the hardware or software producer is accountable for, while easing the burden of proof placed on claimants for damage it has caused.

In this rapidly evolving market, insurers in my own country, Italy and around the world will need to be alert to new exposures and opportunities alike.

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