Module · Who pays when the AI is wrong

The AI Liability & Insurance Check

When an AI output causes real damage, the question is not whose fault it feels like, but which contract, which policy, and which clause actually carries the cost. Most companies discover the answer during the claim, which is the worst possible time. This module checks the five places liability hides: your own contracts, your insurance, your vendors' indemnities, what you tell customers, and whether anyone has modelled what a bad day would cost.

Question 1 of 5 · Liability is mapped

If an AI output caused a customer loss, do you know which of your contracts carries it?

AI outputs flow into deliverables governed by contracts written before AI was in the picture. Those contracts still allocate liability, usually to you, whether or not anyone has read them with AI in mind. Mapping that exposure per contract type is cheaper than discovering it in a dispute.

Question 2 of 5 · Insurance actually covers it

Does your insurance cover a loss caused by an AI system, and have you confirmed that?

Standard professional and cyber policies were not written with AI errors in mind, and some now exclude them explicitly. Assuming you are covered is not the same as your insurer agreeing. The time to have that conversation is before the claim, not during it.

Question 3 of 5 · Vendors carry their share

When you use a vendor's AI, do their contracts actually indemnify you if it fails?

AI vendors work hard to push liability downstream: caps at the subscription fee, disclaimers on accuracy, no indemnity for outputs. If their contract leaves the risk with you, their model failing becomes your problem to pay for. What the indemnity says matters more than what the salesperson promised.

Question 4 of 5 · Customers were told

Do your customers know when AI is involved, in a way that holds up legally?

A disclaimer that AI assisted an output can limit your liability, but only if it is clear, visible and honest, not buried in a footer. Silence about AI involvement can look like a misrepresentation once something goes wrong. This is a drafting decision, made deliberately or made for you.

Question 5 of 5 · The bad day is modelled

Has anyone worked out what your worst realistic AI failure would actually cost?

You cannot size insurance, indemnities or reserves against a number nobody has estimated. A rough model of the plausible worst case, direct loss, remediation, legal, reputational, tells you whether your controls are proportionate or theatre. The first serious incident is an expensive way to learn the figure.

For the statistics · one click each

Three questions for the public picture

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Do you know whether your insurance covers AI-caused losses?

No idea

We assume so

Reviewing it now

Confirmed in writing

Confirmed excluded

Have you mapped where AI output creates contractual liability?

Not at all

For some contracts

For most contracts

Fully mapped

Not sure

Has anyone estimated the cost of your worst realistic AI failure?

Never

A rough guess

One scenario modelled

Several scenarios modelled

Prefer not to say

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