Affirmative protection against the regulatory and legal risks of AI decision-making. As regulators from the FTC, EEOC, and EU AI Act increase scrutiny on algorithmic systems, organizations need coverage that explicitly addresses AI-specific liabilities.

The Risk

AI "hallucinations"—factually incorrect outputs generated by machine learning models—can lead to mispricing, incorrect underwriting decisions, discriminatory outcomes, or significant reputational damage. Whether it's a chatbot providing false information or an algorithm producing biased hiring recommendations, the consequences can be severe and costly.

The Exclusion Gap

Many standard D&O and E&O carriers are now adding "Absolute AI Exclusions" that bar coverage for any claim related to the "decision-making process" of an AI system. This means your existing policies may provide zero protection when you need it most—leaving your organization exposed to:

• Regulatory enforcement actions and fines
• Class action lawsuits alleging algorithmic discrimination
• Individual claims arising from AI-driven decisions

The Solution

Ocean Falls Insurance provides affirmative coverage that specifically includes errors, omissions, or inaccuracies in the AI's functioning—even when a human makes the final decision based on AI recommendations. Our policy covers:

• Legal defense costs for AI-related claims and regulatory investigations
• Settlements and judgments arising from algorithmic bias allegations
• Coverage for "human-in-the-loop" scenarios where AI informs but doesn't solely determine outcomes
• Protection against claims regardless of the truth or falsity of the allegations

Don't let silent exclusions leave your organization vulnerable. Partner with Ocean Falls Insurance for coverage designed for the AI era.