Major insurance companies, including AIG, Great American, and WR Berkley, are seeking regulatory approval to exclude AI-related liabilities from corporate policies due to the unpredictable nature of AI models. Recent incidents, such as Googles false accusation of legal troubles and Air Canadas chatbot-created discount, highlight the potential for AI to generate costly errors and facilitate fraud. Insurers are concerned about systemic risk from thousands of simultaneous claims if a widely used AI model malfunctions. This situation underscores the need for adaptation in risk assessment and liability frameworks as AI becomes increasingly central to business operations.

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