Vouch, a business insurance provider for technology companies, has launched a new insurance product called AI Insurance to support AI start-ups embroiled in legal tussles and accelerate innovation.
The new offering has been designed to cover financial losses from AI products or services, addressing critical risks.
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These risks mainly include algorithmic bias, LLM hallucinations, regulatory investigations and intellectual property infringement claims related to systems that leverage AI algorithms.
AI Insurance, according to Vouch, represents a significant development for AI start-ups amidst a backdrop of class-action lawsuits, regulatory uncertainty and increased risk awareness.
The product also provides coverage for defence costs and damages, regardless of fault, allowing start-ups to preserve capital and sustain their growth trajectory.
Vouch said that its expertise in handling claims ensures that start-ups can focus on their core business activities without the stress of legal challenges, and avoid potential tension between internal innovation and risk management teams.
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By GlobalDataThe company added that AI Insurance can serve as a foundation for a comprehensive AI risk management strategy, fostering trust among stakeholders and start-ups.
Vouch chief insurance officer John Wallace said: “In just half a year, we have seen a surge in AI start-ups – going from 10% to 70% of the new companies we work with. The launch of AI Insurance shows how quick we are to spot and respond to new risks and potential coverage deficiencies in emerging industries.”
Based in the US, Vouch provides business insurance solutions to rapidly growing companies.
Since its establishment in 2018, the company has secured more than $160m in funding from Silicon Valley investors including Ribbit Capital, Y Combinator, Redpoint Ventures and Index Ventures.
Vouch has distinguished itself by offering expert risk management advice, proprietary pricing and underwriting methods, rapid digital-first procurement and scalable coverage options.
In November 2022, Vouch collaborated with British specialist insurer Capsule to serve its combined customer base, focusing on start-ups and tech innovators across all key markets.
