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AI Insurance

AI Startup Insurance

From liability concerns stemming from autonomous decision-making to the protection of intellectual property and data security, the insurance industry is evolving to address the complex and ever-changing needs of AI enterprises. Our goal is to provide comprehensive, tailored insurance solutions that enable AI startups to thrive and innovate with confidence, underpinned by a safety net that understands and evolves with the intricacies of AI technology.

Why is Insurance for AI
Companies Important?

Insurance for AI companies is crucial due to the unique and often unprecedented risks associated with the development and deployment of artificial intelligence. As AI continues to integrate into various sectors, the potential for unforeseen liabilities increases. Insurance not only provides a safety net for these companies but also fosters a more stable environment for innovation and growth.

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Liability Protection

AI applications can lead to unpredictable outcomes, which might result in significant liabilities for companies. Insurance for AI companies covers these liabilities, ensuring protection against legal claims arising from AI-driven decisions or malfunctions. This is vital in an industry where the technology’s decision-making process can be as complex as it is opaque, making it difficult to attribute blame or cause.

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Intellectual Property Risks

In the AI sector, intellectual property is a cornerstone asset. Insurance helps in safeguarding against the theft, infringement, or loss of these crucial assets. Given the competitive nature of the AI industry, where proprietary algorithms and data sets are key to a company’s success, protecting these assets is paramount.

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Operational Continuity

AI companies often deal with cutting-edge technology that may malfunction or be disrupted. Insurance helps ensure operational continuity in the face of such setbacks, providing coverage for losses resulting from system failures or downtime. This is particularly important for AI companies whose operations are critical to the industries they serve.

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Investor Confidence

Insurance provides a level of security that is attractive to investors. It demonstrates risk management and a commitment to long-term viability, which can be crucial for startups seeking funding. In an industry as dynamic and uncertain as AI, showing that risks are effectively managed can be a significant factor in attracting investment.

AI Insurance
Coverage & Policies

These coverages form the foundation of any risk management program for AI companies:

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Errors & Omissions (E&O) Learn More
Errors & Omissions (E&O)

This insurance covers claims against a business that provides professional advice or services, protecting it from lawsuits alleging negligence, mistakes, or failure to deliver a service as promised. AI companies, often engaged in providing specialized services or advice based on their algorithms and data, can be protected against claims of negligence or insufficient or erroneous services. This is particularly vital given the experimental and rapidly evolving nature of AI technology.

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Cyber Liability Learn More
Cyber Liability

This policy protects businesses from internet-based risks and, more generally, from risks relating to information technology infrastructure and activities. Given the heavy reliance on data and digital operations in AI companies, this insurance is crucial. It protects against data breaches, cyber-attacks, and loss of sensitive customer information, which are significant risks in the field of AI.

Product Liability Learn More
Product Liability

This policy covers businesses against claims of personal injury or property damage caused by products sold or supplied through the business. AI companies developing physical products, like robotics or AI-powered devices, need this insurance to protect against claims of damage or injury caused by their products. Given the autonomous nature of many AI products, this insurance is particularly important.

AI Specific

These policies are essential for or can be tailored to the needs of companies operating in the fintech space:

Digital Asset Insurance
Tech E&O Learn More
Tech E&O

Similar to E&O, but specifically tailored for technology companies, this insurance covers both the service and product aspects of tech businesses. Tech E&O is a blend of E&O and product liability insurance, making it ideal for AI companies that offer both services (like data analysis) and products (like software). It addresses the unique blend of risks in companies operating at the intersection of technology service and product development.

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Directors & Officers (D&O) Learn More
Directors & Officers (D&O)

This policy protects the personal assets of corporate directors and officers, and their spouses, in the event they are personally sued for actual or alleged wrongful acts in managing a company. AI companies, particularly startups, can face significant strategic and financial risks. D&O insurance can help attract high-caliber directors and officers by providing them protection against personal liabilities, which is crucial for making high-stakes decisions in the dynamic AI industry.

Intellectual Property
Intellectual Property (IP) Learn More
Intellectual Property (IP)

This insurance covers businesses for costs associated with the legal defense of intellectual property claims and any damages awarded in such legal disputes. AI companies rely heavily on their IP (like algorithms, proprietary technologies, and data). IP insurance is vital in protecting these assets from infringement claims and in covering the often substantial legal costs involved in defending their IP rights in a highly competitive market.

AI Insurance Costs

The cost of insurance for AI companies can vary widely, influenced by a multitude of factors specific to the nature, scale, and scope of the AI technology and applications involved. As a rule, the more complex and potentially risky the AI application, the higher the insurance premium. For instance, an AI company working in healthcare diagnostics will likely face higher premiums due to the significant risks associated with medical outcomes compared to a company developing AI for less critical applications.

Key determinants of insurance costs include the company’s size, revenue, claim history, the specific type of AI technology developed, and the application areas. The level of coverage required also plays a significant role; broader coverage with higher limits will naturally cost more. Additionally, the company’s risk management practices, such as adherence to ethical AI guidelines, data protection protocols, and robustness of the AI algorithms, can impact the insurance premiums.

It’s also important to note that as the AI industry continues to evolve, insurance providers are constantly updating their models to assess risks more accurately. This dynamic nature can lead to fluctuations in insurance costs over time. For AI companies, working closely with insurers who understand the unique challenges of AI technology is crucial to obtain the most appropriate and cost-effective coverage.

AI Claims & Examples

Navigating a commercial insurance claim is often challenging, often fraught with confusion and multiple unknown factors. The following four-part series outlines the ins and outs of what to know regarding commercial insurance claims:

Types of AI Companies That Need Insurance

  • Technology Startups: Companies innovating in fields like machine learning, natural language processing, and robotics. These startups often develop new AI applications and technologies, including AI-powered software, AI-driven platforms, and smart automation tools.
  • Healthcare Companies: Firms using AI for drug discovery, patient diagnostics, personalized medicine, and healthcare management. These companies utilize machine learning algorithms for disease prediction, AI-based diagnostic tools, and personalized treatment plans, involving significant liability risks.
  • Automotive Industry: Companies involved in the development of autonomous vehicles, AI-based safety features, and advanced driver-assistance systems (ADAS). The use of AI in vehicles introduces complex liability and safety concerns, including regulatory challenges and ethical considerations.
  • Financial Services: Businesses employing AI for algorithmic trading, risk assessment, fraud detection, and customer service automation. AI in finance involves significant data and privacy risks, leveraging technologies like deep learning for market prediction and natural language processing for chatbots and virtual assistants.
  • Retail and E-Commerce: Companies using AI for customer behavior analysis, personalized recommendations, inventory management, and automated customer service. AI helps optimize supply chain logistics, enhance shopping experiences with virtual try-ons, and drive targeted marketing campaigns.
  • Manufacturing Companies: Firms leveraging AI for predictive maintenance, supply chain optimization, and automation of manufacturing processes. These companies use AI-driven robotics, real-time data analytics, and IoT integration to enhance production efficiency and reduce downtime.
  • Telecommunications: Companies employing AI for network optimization, predictive maintenance, customer service automation, and data traffic analysis. AI is used to improve network reliability, manage bandwidth, and provide personalized services to customers through AI-driven insights.
  • Media and Entertainment: Businesses using AI for content recommendation, personalization, and consumer behavior analysis. AI enhances user experiences by suggesting personalized content, automating video editing, and analyzing viewer preferences for better content creation.
  • Security Firms: Companies utilizing AI for threat detection, cybersecurity, and surveillance. AI in security often involves critical data protection, real-time threat analysis, and advanced encryption techniques to safeguard sensitive information and ensure privacy.
  • Educational Institutions and EdTech Companies: Using AI for personalized learning, student performance analysis, and educational content development. These entities leverage AI to create adaptive learning platforms, provide real-time feedback, and develop interactive educational tools.
  • LLM (Large Language Model) Companies: Companies specializing in developing and deploying large language models for various applications, including natural language understanding, automated content generation, and conversational AI. These companies are at the forefront of AI research and innovation.
  • Visual AI Companies: Firms focused on computer vision technologies, including image recognition, video analysis, and augmented reality. These companies develop AI solutions for facial recognition, object detection, and visual data processing for diverse applications.
  • Energy Sector AI Companies: Companies leveraging AI to optimize energy consumption, manage smart grids, and develop renewable energy solutions. AI in the energy sector helps in predictive maintenance, energy forecasting, and enhancing efficiency in energy production and distribution.
  • Legal Tech Companies: Firms using AI for legal research, contract analysis, and automating routine legal tasks. These companies develop AI-driven tools for legal professionals to enhance efficiency, ensure compliance, and manage legal documentation effectively.

AI Frequently Asked

The cost of insurance for fintech companies will depend on several things, including the company’s size and development stage. Other factors include:

  • Exposures: risks being insured
  • Company practices: views on safety, compliance, and risk management
  • Program structure: the amount of deductible and willingness for a company to assume more risk
  • Claims history: the type and amount of past claims against the company


AI insurance is not typically mandated by law, but it may be considered essential depending on the nature and scale of your AI operations. For businesses involved in AI development or deployment, the potential risks — like data breaches, algorithmic biases, and operational errors — can be substantial. While not legally required, having insurance is a prudent business decision, especially given the rapidly evolving regulatory landscape around AI technologies. In some cases, clients or partners may require proof of insurance before engaging in business, making AI insurance an operational necessity.

The amount of AI insurance needed varies based on several factors, including the size of your company, the type of AI applications you’re working with, your revenue, and the specific risks associated with your AI operations. A good starting point is to assess the potential financial impact of risks like data breaches, product failures, or legal liabilities. Consulting with an insurance professional who understands the AI sector can help you determine an adequate coverage level that aligns with your risk profile and business needs.

To obtain AI insurance, start by researching insurance providers that specialize in technology or AI-related coverage. It’s advisable to choose an insurer with expertise in the AI field, as they’ll better understand the unique risks and needs of your business. You may need to provide detailed information about your AI applications, data security measures, risk management practices, and previous claims history. An insurance broker can also assist in finding the right policy and negotiating terms that best suit your business needs.

Business Liability Insurance, also known as General Liability Insurance, protects businesses against various liabilities, including bodily injury, property damage, and personal injury caused to third parties. This type of insurance is fundamental for businesses of all sizes, offering protection against common risks encountered in day-to-day operations. It doesn’t typically cover specialized risks associated with AI, but it’s an essential part of a comprehensive business insurance portfolio.

AI insurance can offer specific protections against data breaches, which are a significant risk for AI companies handling large volumes of sensitive data. This coverage typically includes the costs associated with a data breach, such as legal fees, notification costs, credit monitoring services for affected individuals, and any fines or penalties. It may also cover public relations expenses to manage the reputational damage. Since AI companies are often targets for cyberattacks, this aspect of AI insurance is critical.

Yes, AI insurance policies can often be customized to meet the specific needs of your business. Given the diverse applications and risks associated with AI, insurance providers typically offer a range of coverage options that can be tailored. These might include specific clauses for intellectual property protection, data breach coverage, or product liability. It’s important to work closely with your insurer to ensure that your policy covers the unique aspects of your AI operations and associated risks.

AI Insurance Quotes

Finding AI insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined and intuitive as possible.

Get a quote

Use our custom-built digital platform to get quotes fast. We automate clerical tasks that plague traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

Wil Hamory Vice President
Wil Hamory, Vice President at Founder Shield

your specialist

Wil’s aim is to match the pace of business of Founder Shield’s innovative clientele to provide tailored insurance solutions at scale. He has been involved in the mobility industry since its infancy and assisted many of Founder Shield’s On-Demand and Fintech clients meet legal requirements while positioning them to rapidly expand.

Why Choose Founder Shield?

Founder Shield is a leading insurance provider that specializes in offering comprehensive coverage for AI companies, offering numerous benefits and advantages over traditional insurance providers. Here’s a breakdown of some of the key features and benefits that you’ll enjoy with us:

Benefits of Choosing Founder Shield:
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Industry Expertise

Founder Shield is focused on protecting rapidly evolving AI startups. We ensure that our products are tailored to meet the unique needs of AI businesses.

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Customized Solutions

Founder Shield offers bespoke insurance policies that are designed specifically for each client’s needs, ensuring comprehensive coverage that addresses the unique risks associated with AI operations.

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Fast Quotes

With Founder Shield’s streamlined quoting process, you can receive a personalized quote for your AI insurance quickly, allowing you to make informed decisions fast.

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Ease of Use

Founder Shield’s user-friendly digital platform makes it easy to manage your insurance policies, submit claims, and access important documents whenever you need them.

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Dedicated Support

Founder Shield provides exceptional customer service, with dedicated account managers who are always available to assist you with any questions or concerns you may have about your insurance coverage.

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Scalable Coverage

 As your AI business grows, Founder Shield’s insurance policies can grow with you, ensuring you always have the right level of coverage for your changing needs.

Founder Shield is a preferred choice for fintech businesses because of our specialization in the industry. We offer flexible and customized insurance policies, speedy quoting process, and exceptional customer service with dedicated account managers.