Today in Tech Deepfakes, hallucinations, lawsuits: The new reality of AI risk insurance
Mar 10, 2026
Josh Motta, co-founder and CEO of Coalition and expert in cyber and AI risk, explains how AI is becoming a new enterprise peril. He covers where existing policies may or may not respond, rising deepfake and AI-fraud claims, emerging professional liability exclusions, and what boards and risk teams should ask insurers as AI-driven legal and privacy threats grow.
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AI Insurance Focuses On Model Builders Not Users
- Most AI-specific insurance to date focuses on foundational model builders, not Main Street users of off‑the‑shelf tools.
- Motta notes insurers cover hallucinations or jailbreak risks for model providers but few products exist for ordinary businesses integrating third‑party AI.
Document Costs Rapidly When Deepfakes Hit
- Prepare to pay for forensics, PR, and demonstrate lost income when deepfakes strike to access coverage.
- Motta says Coalition added an endorsement for deepfake impersonation that covers forensics, PR costs, and potential lost income if demonstrable.
Criminal Use Of AI Drives Insurance Costs Up
- Increased use of AI by criminals raises frequency and severity, pushing cyber insurance rates higher.
- Motta explains insurers price on frequency×severity; AI-enabled social engineering and automation intensify both factors.