The Broker, The Bot, And The Blame: Untangling Liability In AI-driven Insurance

Artificial intelligence (AI) is rapidly transforming the insurance industry, prompting Canadian insurance brokers to evaluate the legal challenges associated with its adoption and ongoing use.

AI vendors: The need for thorough due diligence

Many insurance brokerages depend on third-party AI platforms rather than developing their own systems, making the due diligence process essential before entering into vendor agreements. Brokerages should verify that the vendor's AI employs unbiased data, adheres to ethical standards, and manages client information securely. Evaluations should also include the vendor's data protection practices, record of cyberattack incidents, and the transparency of the AI's decision-making process.