The insurance industry might have its next big hit: Covering losses caused by AI chatbots’ gaffes.
Driving the news: Insurance marketplace Lloyd’s of London has rolled out a new product that will cover any damages caused by companies’ in-house AI chatbots, according to the Financial Times.
- The insurance policies, which were developed by startup Armilla, cover legal costs and damages if a company is sued by a customer over mistakes made by an AI chatbot.
Why it’s happening: Over half of companies are already using AI for customer service, but these tools are still prone to costly slip-ups. Just last year, Air Canada was ordered to honour a completely made-up discount that its chatbot had given a customer.
- In similarly embarrassing incidents, Virgin Money’s AI tool ripped into a customer for using the word “virgin,” delivery company DPD’s chatbot went on a tirade, angrily swearing at customers, and Chevrolet’s AI chatbot offered a customer a car for $1.
Why it matters: Most people really don’t want to interact with AI customer service chatbots, but having the blunders they make covered by insurance will only make it easier for businesses to replace human workers with much cheaper AI systems.—LA