Insurers Spot a New AI Money Pit, Start Selling Shovels

Cyber insurance company Cowbell has launched a new standalone policy called AI Liability Insurance, aimed at small and midsized businesses using AI agents. The policy covers a range of potential disasters, including 'model drift,' unauthorized actions like paying suppliers twice, 'LLMjacking' where outsiders run up API bills on stolen credentials, and lawsuits from customers over AI errors like filing incorrect tax returns. It also covers costs for investigations, taking agents offline, and even regulatory fines where permitted.

The move signals a familiar pattern: as businesses rush to deploy autonomous AI agents to save money and streamline operations, the industry is already anticipating the predictable cascade of new risks and errors. This creates a lucrative new market for insurers to step in and sell protection against the very problems their new technology introduces. It’s the tech industry's classic playbook—build the new shiny thing, then sell you the insurance for when it inevitably goes wrong.