3 ms·

Was it also commonplace to have insurances covering human errors? For example: > A tribunal last year ordered Air Canada to honour a discount that its custome

Was it also commonplace to have insurances covering human errors? For example: > A tribunal last year ordered Air Canada to honour a discount that its customer service chatbot had made up. If a human sales representative had made that mistake instead of a chatbot, I wonder if companies will try to recover that cost through insurance. Or perhaps AI insurance won't cover the chatbot for that either?

loeber 1y ago
Yes, this is called Professional Liability or Errors & Omissions insurance. It's an important insurance category, but limited in market size. It's uncommon to have e.g. human sales representatives covered for this, but your doctor, lawyer, accountant, architect, etc. will all carry this kind of insurance.
- kayodelycaon 1y ago
  I worked in this market for a few years. It was fascinating. I still have some ACORD documentation from that. I learned very quickly that standards aren’t. :)
- kjs3 1y ago
  I carried E&O for years as an independent consultant. I fortunately never had to use it, but I have peers whose financial future was probably saved by having it.
  - SoftTalker 1y ago
    How is it priced? I was always under the impression that it was prohibitively expensive for one-person operations.
    - jabroni_salad 1y ago
      When I got quotes a couple years ago it was around $90-120 USD per month from most of the providers for a solo operator IT consultant.
- notahacker 1y ago
  The key bit is why those niches have it: typically either regulators require it or clients require it (sometimes specifying it to a given value in their contract). And that's because the consequences of mistakes some professions make can be very expensive relative to the size of their business. Also helps that a lot of the errors they cover are very rare so pooling the risk as insurance makes more sense... cf an airline chatbot agreeing to an inappropriate refund or giving wrong advice that leaves the airline deciding to apologise and pay their holiday-related expenses. Those are costs it makes more sense for the airline to eat than get their insurers to price up (unlike other aviation insurance which can be for eye-wateringly large sums) even if it happens several times a month (which if your chatbot is an LLM supposed to handle a wide variety of questions it probably does). Same goes for the human sales representatives who may work with higher-stakes relationships than chatbots but the consequence of their error is usually not much bigger than issue refund or lose client relationship I guess chatbots/LLMs will end up as a special case for professional indemnity insurance in a lot of those regulated firms as lawyers/accountants start to use them in certain contexts.
  - willyt 1y ago
    Yes. I would say it probably makes more sense that whoever designed the chatbot system for the airline will need indemnity insurance. Then the airline has somewhere to go if it starts giving out free plane tickets willy nilly.
  - gblargg 1y ago
    Good point about risk versus pool size. An airline can "self"-insure if it's a common error, since there's no uncertainty as to whether it will happen in any given month. Insurance can't magically make it cost them less, and there's very little risk in covering the costs themselves. With a high-cost possibility that's rare, they can't tie up the huge sum of money for something that will probably never happen to themselves, so insurance is superior.
- deleted 1y ago
  [deleted]
dghlsakjg 1y ago
The Air Canada case is interesting since it predates LLMs. If you read the details it was basically the chatbot had been programmed to respond to point at a policy that for some reason differed from what Air Canada claimed was its actual policy. Nothing was made up, Air Canada simply had two contradictory policies based on where you were on the site. A customer trusted the policy that the chatbot provided to make a decision, and the tribunal said that it was reasonable for the customer to make a decision based on that policy, and that the airline had to honor that policy.

loeber 1y ago

Yes, this is called Professional Liability or Errors & Omissions insurance. It's an important insurance category, but limited in market size. It's uncommon to have e.g. human sales representatives covered for this, but your doctor, lawyer, accountant, architect, etc. will all carry this kind of insurance.

kayodelycaon 1y ago
I worked in this market for a few years. It was fascinating. I still have some ACORD documentation from that. I learned very quickly that standards aren’t. :)
kjs3 1y ago
I carried E&O for years as an independent consultant. I fortunately never had to use it, but I have peers whose financial future was probably saved by having it.
- SoftTalker 1y ago
  How is it priced? I was always under the impression that it was prohibitively expensive for one-person operations.
  - jabroni_salad 1y ago
    When I got quotes a couple years ago it was around $90-120 USD per month from most of the providers for a solo operator IT consultant.
notahacker 1y ago
The key bit is why those niches have it: typically either regulators require it or clients require it (sometimes specifying it to a given value in their contract). And that's because the consequences of mistakes some professions make can be very expensive relative to the size of their business. Also helps that a lot of the errors they cover are very rare so pooling the risk as insurance makes more sense... cf an airline chatbot agreeing to an inappropriate refund or giving wrong advice that leaves the airline deciding to apologise and pay their holiday-related expenses. Those are costs it makes more sense for the airline to eat than get their insurers to price up (unlike other aviation insurance which can be for eye-wateringly large sums) even if it happens several times a month (which if your chatbot is an LLM supposed to handle a wide variety of questions it probably does). Same goes for the human sales representatives who may work with higher-stakes relationships than chatbots but the consequence of their error is usually not much bigger than issue refund or lose client relationship I guess chatbots/LLMs will end up as a special case for professional indemnity insurance in a lot of those regulated firms as lawyers/accountants start to use them in certain contexts.
- willyt 1y ago
  Yes. I would say it probably makes more sense that whoever designed the chatbot system for the airline will need indemnity insurance. Then the airline has somewhere to go if it starts giving out free plane tickets willy nilly.
- gblargg 1y ago
  Good point about risk versus pool size. An airline can "self"-insure if it's a common error, since there's no uncertainty as to whether it will happen in any given month. Insurance can't magically make it cost them less, and there's very little risk in covering the costs themselves. With a high-cost possibility that's rare, they can't tie up the huge sum of money for something that will probably never happen to themselves, so insurance is superior.
deleted 1y ago
[deleted]

dghlsakjg 1y ago

The Air Canada case is interesting since it predates LLMs. If you read the details it was basically the chatbot had been programmed to respond to point at a policy that for some reason differed from what Air Canada claimed was its actual policy. Nothing was made up, Air Canada simply had two contradictory policies based on where you were on the site. A customer trusted the policy that the chatbot provided to make a decision, and the tribunal said that it was reasonable for the customer to make a decision based on that policy, and that the airline had to honor that policy.