Chaucer has launched a standalone third-party liability insurance product designed to address the evolving liability risks arising from AI system underperformance.

Developed in collaboration with Armilla AI, the product is available to US insureds with global territorial limits, with the binder led by Chaucer. It will cover hallucinations, model drift, mechanical failures and other deviations from expected AI behaviour, and legal defence and liability protection for claims arising from such underperformance.

Tom Graham, head of partnership and innovation, Chaucer commented: “Our partnership with Armilla AI has enabled us to co-develop a product that not only recognises the complexities of AI underperformance but provides meaningful coverage that supports innovation, transparency and accountability. This launch marks a pivotal step in how we insure the technologies of tomorrow.”

Karthik Ramakrishnan, CEO, Armilla AI added: “Partnering with Chaucer marks a major milestone in our mission to make AI safer for everyone. Our new AI liability coverage empowers organisations to adopt cutting-edge technology, while knowing they’re protected against the unique risks AI can bring. At Armilla, we’ve pioneered advanced methodologies to identify and mitigate AI-related vulnerabilities – from early development to deployment at scale. We’re putting these insights into action through robust insurance coverage, enabling organisations to adopt AI responsibly and confidently push the boundaries of innovation.”

The new TPL product builds on an earlier collaboration between both companies on a warranty-style product which responded to increased market appetite for broader liability protection.

---