Your AI Startup Is Smarter Than Ever. But Is Your Insurance?

AI can write code, draft emails, and pass the bar exam. But it still can’t predict its own lawsuit.

Your model gives the wrong output. Your client relies on it. Your inbox fills up with angry emails, or worse: subpoenas.

Whose fault is it? The engineer? The dataset? The algorithm?

Short answer: everyone’s. Long answer: your company’s…at least legally.

California Just Raised the Stakes

The new wave of AI regulation in California — SB 53, AB 2013, and the AI Transparency Act — just made AI accountability real.

You now need:

• Safety documentation for large models

• Disclosure when content is AI-generated

• Transparent data provenance for training data

• Bias testing and human oversight in hiring algorithms

You’re not just a startup anymore. You’re an AI manufacturer, with a paper trail.

Where Insurance Starts to Fall Behind

Here’s the uncomfortable truth: Most insurance policies weren’t written for AI companies, and most insurance brokers have no idea how to work with underwriters to change that for certain clients.

Here’s where AI gaps tend exist in typical policies:

• D&O - Doesn’t mention algorithmic accounatability

• E&O/Tech liability - Doesn’t include “model hallucinations” or false outputs

• Cyber - Excludes misuse of training data or model leakage

• EPL - Doesn’t account for bias created by automated systems

In other words: your model might be groundbreaking, but your coverage might still be stuck in 2019.

What Smart Founders Do Now

1. Review Your Policies.
   Look for exclusions like “algorithmic,” “predictive,” or “AI-based” errors.

2. Document Your Model Risk.
   Keep bias audits, training data records, and explainability notes.

3. Update Your Contracts.
   Shift liability from clients and vendors appropriately.

4. Work With Brokers Who Can Speak “AI.”
   You don’t need someone who “sells insurance.” You need someone who can explain your model to an underwriter.

The Execurisk Take

AI risk isn’t scary. It’s just… underwritten wrong. We help founders and investors bridge the gap between innovation and protection, so you can build the future without fearing the fine print.

Execurisk. Startup insurance for bold companies in LA.