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Relm Insurance Launches AI Liability Solutions to Address Emerging Risks in the AI Ecosystem

01/14/25 - Relm Insurance (‘Relm’), the leading provider of innovative insurance solutions, is excited to announce the launch of three cutting-edge AI insurance products: NOVAAI, PONTAAI, and RESCAAI.

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With artificial intelligence increasingly interwoven in company supply chains, the risk profile is evolving rapidly.

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Relm’s new product suite is designed to provide tailored coverage for the dynamic companies creating and adopting AI technology. A snapshot of emerging insurance industry issues is outlined below.

  • Regulatory Complexity
    The rapidly evolving regulatory landscape for AI, including frameworks such as the EU’s AI Act, US state-level legislation, and other jurisdiction-specific guidelines, creates significant challenges for companies and insurers alike. These regulations introduce uncertainty around compliance, liability, and governance, with varying interpretations and enforcement standards across regions. Insurers must navigate these complexities to design policies that align with both current and anticipated regulatory requirements while providing clarity and protection for AI adopters.
  • Cybersecurity Implications of AI Integration
    AI systems, while improving efficiency, can also introduce vulnerabilities like susceptibility to adversarial attacks or data breaches. Insurers need to evaluate how these risks affect both first-party exposures (to the insured) and third-party liabilities (to customers or partners).
  • Algorithmic Accountability and Bias Liability
    As companies integrate AI into decision-making processes, insurers face challenges in assessing liability for unintended consequences, such as algorithmic bias or discriminatory outcomes. Questions about who is accountable — developers, users, or third-party vendors — create complexities in underwriting and claims handling.
  • Silent AI Risk
    The lack of clarity around AI-related exposures in traditional insurance policies has given rise to ‘silent AI risk’, where coverage intentions are neither explicitly affirmed nor excluded. This ambiguity leaves organizations uncertain about their protection against AI-related liabilities and can result in significant uncovered exposures. Insurers are now tasked with addressing these gaps by providing affirmative coverage tailored to AI risks, ensuring transparency and confidence for businesses integrating AI into their operations.

“The rapid advancement and widespread adoption of AI have created a critical need for insurance solutions that specifically address the unique risk exposures arising from its integration into core technology, systems, and workflows” said Joseph Ziolkowski, CEO and Founder of Relm Insurance. “Our aim is to provide clarity and confidence in an area where traditional approaches fall short, enabling businesses to innovate with AI securely and responsibly.”

Relm’s new products are designed to provide comprehensive coverage for these emerging risks, both for businesses creating and integrated with AI, and those using AI in peripheral ways.

Claire Davey, Head of Product Innovation & Emerging Risk at Relm, said, “We’re aware that AI risks are not homogenous — how organizations use AI technology plays a significant role in shaping the risk vectors. This is why we released a suite of three products, each specifically designed to respond to the different use cases of AI technologies.”

An overview of the products, their applicable users, and coverage highlights are below.

NOVAAI – Cyber and Tech E&O policy

Applicable Users

  • AI platform companies.
  • AI-based product and service companies who have a liability and cyber security exposure as a result of the AI software they are developing and selling.

Coverage Highlights

  • Liability for AI tech products & services
  • Media liability for AI generated content
  • AI regulatory liability cover
  • Discrimination exclusion carveback
  • AI regulatory liability cover
  • ‘Deep-fake’ digital crime cover

PONTAAI – Excess Difference in Conditions (DIC) Wrap policy

Applicable Users

Organizations with third-party liability exposure due to their AI use or development, but whose existing liability programs may exclude AI.

Coverage Highlights

‘Artificial intelligence liability’ arising from:

  • Professional negligence
  • IP Infringement
  • Personal injury
  • Discrimination
  • Privacy breach
  • Bodily injury
  • Property damage
  • Violation of AI regulations

RESCAAI – First-party response policy 

Applicable Users

  • Organizations that use third party AI for business operations.
  • Organizations that embed third-party AI solutions within their own products.

Coverage Highlights

  • Business Interruption
  • Reputational Harm
  • Product Recall Expenses
  • Incident Response Costs

This product launch comes after Relm became the first specialty insurer for innovative industries with a 50-state MGA, and announced the hiring of industry veteran Keith Lavigne as Head of Underwriting – US.

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