Ask 50 people you meet what tech has dominated the 2020s so far and many would say “AI”. Since late 2022, with the advent of OpenAI’s ChatGPT, people have been positioning AI as one of the most transformative technologies that could offer opportunities for efficiency, innovation and growth. That being said, AI is not sans its risks, just like many powerful technologies. But, the applications of AI could be so ground-breaking, that when AI systems fail or make errors, the consequences could be significant and costly. Who you gonna blame? The robots? So, who you gonna call? The insurance folks?
Here’s how insurance, traditionally, works. You get a safety net for unexpected events in life. It would protect you from financial losses that could happen and this could be due to accidents, health issues, disasters or other unforeseen circumstances.
So, you pay a regular amount of money called premiums paid monthly or annually. You buy insurance from a company that collects premiums. Many folks pay premiums into a big pool, some of whom would face unfortunate events, for which they would need financial help. At that point, they could make a claim to the insurance company, which the insurance company assesses and if they deem it to be a valid claim, the person would be provided with financial assistance to help cover costs related to the incident. The insurance policy could have certain limits, which is the minimum amount the insurance company could pay and there could be a deductible, which is an initial amount you would need to cover before the company starts paying.
