Will this encourage more AI experimentation?

https://www.ft.com/content/1d35759f-f2a9-46c4-904b-4a78ccc027df

Insurers launch cover for losses caused by AI chatbot errors

Insurers at Lloyd’s of London have launched a product to cover companies for losses caused by malfunctioning artificial intelligence tools, as the sector aims to profit from concerns about the risk of costly hallucinations and errors by chatbots.

The policies developed by Armilla, a start-up backed by Y Combinator, will cover the cost of court claims against a company if it is sued by a customer or another third party who has suffered harm because of an AI tool underperforming.

The insurance will be underwritten by several Lloyd’s insurers and will cover costs such as damages and legal fees.

Companies have rushed to adopt AI to boost efficiency but some tools, including customer service bots, have faced embarrassing and costly mistakes. Such mistakes can occur, for example, because of flaws which cause AI language models to “hallucinate” or make things up.