Relm’s PONTAAI Solution: AI Insurance Coverage Beyond Existing Liability Programs

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Relm’s PONTAAI Solution: AI Insurance Coverage Beyond Existing Liability Programs

02/13/2025 – Many modern businesses harnessing AI are having trouble adapting systems to an ever-evolving landscape. According to Stanford University’s 2023 AI Index, incidents involving the ethical misuse of AI technologies have risen 26-fold since 2012. This is a pertinent issue for insurance buyers, where traditional policies either exclude AI risks or remain ‘silent’ about whether they intend to cover them.

As challenges compound by emerging regulations like the EU’s Artificial Intelligence Act, which introduces stricter liability standards for AI developers and users, Relm has launched a suite of AI insurance products that allow businesses to keep innovating.

PONTAAI is one of three new releases and is an excess Difference in Conditions / Wrap policy designed to address those exclusions or gaps in coverage that may reside within clients’ existing liability insurance programs as a result of their use, or development, of AI.

Specific Shortcomings in Traditional Insurance Policies — and How PONTAAI Addresses Them

Traditional Cyber and Technology Errors & Omissions (E&O), and Professional Liability programs often fall short in covering the distinct risks AI technologies introduce. These programs typically lack affirmative endorsements or clear definitions for exposures such as:

Professional Negligence: Errors in delivering AI-driven solutions that cause financial or operational harm.

Intellectual Property (IP) Infringement: Breaches of third-party copyrights or patents via AI systems.

Discrimination Claims: Bias in algorithms resulting in regulatory actions or lawsuits.

Regulatory Violations: Non-compliance with regulatory frameworks like EU AIA or Colorado’s AI Act.

PONTAAI fills these gaps by acting as an excess ‘AI Wrap’ policy, providing affirmative coverage when underlying coverage within programs such as Cyber/Tech, Professional Indemnity or General Liability fall short.

Key features include:

Broad coverage for damages, claim expenses, and civil fines (where legally insurable) resulting from negligent acts, errors, or omissions in AI services.

Affirmative protection for risks tied to AI-driven operations, including intellectual property infringement, discrimination, personal injury, privacy breaches, and violations of AI-specific regulations.

Coverage for bodily injury or property damage caused by AI system failures.

Real-World Risks Highlight the Need for PONTAAI

As AI technologies integrate deeper into critical business operations, liability risks emerge in unexpected ways. Traditional insurance policies often fall short in addressing these challenges.

Scenario: Predictive AI-Powered Medical Device Misdiagnosis — The Coverage Gap!

A private healthcare provider integrates a Predictive AI-driven diagnostic tool into patient evaluations. The AI system misdiagnoses a critical condition, delaying proper treatment.

When the patient suffers severe complications, they sue the healthcare provider, not the AI vendor, for negligence.

The Coverage Gap

Medical malpractice insurance may exclude claims related to computer system failures, or remain ominously silent, leaving healthcare providers financially exposed.

A General Liability policy purchased by the healthcare provider will typically exclude all bodily injury arising from the provision of professional health care services.

Product liability insurance typically covers the AI vendor for any bodily injury that may result from their product, but not the healthcare providers using the AI as part of their business operations.

Technology Errors & Omissions insurance, typically purchased by AI vendors, excludes bodily injury arising from their products.

How PONTAAI Fills the Gap

PONTAAI was designed to address these very gaps. It provides clear protection for liability resulting from failures in AI-driven decision-making, ensuring that businesses utilizing AI-powered systems in critical sectors like healthcare are protected from financial exposure when things go wrong.

Broker AI Risk Scenario: Where PONTAAI Fits In

Brokers offering PONTAAI not only solve critical client challenges but also differentiate themselves as forward-thinking partners who understand the nuances of AI risk.

Broker Scenario: Logistics Optimization Failures

Consider a broker working with a logistics firm that has implemented AI tools to streamline inventory management and route planning. The AI system promises efficiency but occasionally generates flawed recommendations due to incorrect data inputs or algorithmic issues. This results in shipment delays, missed contractual deadlines, and financial penalties from clients.

When the client turns to their existing liability policies for coverage, they encounter significant gaps:

The Cyber policy only covers lost income for catastrophic security failures, and excludes operational failures.

The Technology E&O policy has exclusions for performance issues linked to third-party AI tools.

By recommending PONTAAI, brokers deliver a solution that mitigates their clients’ financial exposure to emerging AI risks. They enable their clients to close critical liability gaps, strengthening operational resilience against AI-related risks while safeguarding financial stability and reputation in an era of tightening regulations.

Adapting to New Realities with PONTAAI

Transformation brings both opportunity and risk. PONTAAI represents a forward-thinking solution to AI Risk, and is designed to keep pace with the evolving AI landscape.

PONTAAI is one of Relm’s three AI insurance solutions, along with NOVAAI and RESCAAI. Read more on the other offerings in the links below, or reach out via the contact box to for more information on how PONTAAI can safeguard your clients’ operations.

Read: Redefining Risk: How AI is Changing Liability in the Digital World

Read: Relm’s NOVAAI Solution: Insurance for AI Platforms and Developers

Read: Relm’s RESCAAI Solution: Innovative Insurance for AI-Exposed Operations