Artificial intelligence isn’t some lab experiment anymore. It’s out there making decisions, writing content, talking to customers, and in some cases, quietly running parts of businesses whether folks realize it or not.
That sounds great until something goes wrong.
And that’s where things get interesting. Because now, apparently, you can buy insurance for that.
A startup called Corgi says it has created AI insurance, which is supposed to protect companies when their AI systems mess up. On paper, it makes sense. If an AI tool causes financial damage, legal trouble, or even just embarrasses a company publicly, this policy is meant to step in.
But here’s the thing. Traditional insurance already struggles with edge cases, and AI is basically one giant edge case.
Most Tech E&O policies weren’t built for this world. They were designed for software bugs, outages, maybe a bad deployment. Not for a machine that generates unpredictable outputs or makes decisions based on training data nobody fully understands. Some insurers are already backing away from AI risk entirely, quietly excluding it from coverage.
So Corgi sees an opportunity there.
Instead of offering a standalone policy, it plugs into existing insurance and lets companies pick specific types of AI coverage. That includes things like biased outputs, harmful generated content, data misuse, adversarial attacks, deepfake related issues, and autonomous systems doing something they shouldn’t.
If that list sounds broad, it’s because it is.
Think about it. A chatbot gives bad financial advice. An AI writes something defamatory. A model gets trained on data it shouldn’t have touched. These things are happening already. They’re not theoretical anymore.
So yeah, the idea of AI insurance feels almost inevitable.
But let’s not pretend this is simple.
Insurance only works if claims actually get paid. And that’s where I start to get a little skeptical. AI failures are messy. They’re hard to define, harder to prove, and probably even harder to assign blame for. Was it the model? The training data? The company using it? The prompts? Good luck untangling that when money is on the line.
Now imagine trying to file a claim.
Do you really think every edge case gets covered cleanly? Or are we going to see a lot of “this falls outside the scope” when things get complicated?
That’s not a knock specifically on Corgi. It’s just how insurance tends to work. Policies look great until you actually need them. And with something as unpredictable as AI, I wouldn’t be surprised if there are plenty of gray areas.
Still, the fact that this product exists at all says something important.
Companies are moving fast with AI. Maybe too fast. There’s pressure to automate everything, to cut costs, to keep up with competitors. But the safety net isn’t fully there yet. If insurers are either excluding AI risk or trying to repackage it into new products, that tells you the industry itself isn’t totally comfortable with what’s coming.
So where does that leave businesses?
Some will jump on AI insurance just to feel safer. Others will roll the dice and hope nothing goes wrong. And plenty probably haven’t even thought about this yet.
But they should.
Because if your AI system makes a bad call, and it eventually will, someone is going to pay for it. The only real question is whether your insurance company agrees that it’s their problem too.
