Insurance Europe Notes Legal Uncertainty Issues Around AILD

Latest update from Insurance Europe as insurers try to limit liability when it comes to decisions made by AI. This is going to be an area where test cases and class action lawsuits reach higher Courts in Europe and other markets. The question of pure, data driven decisions on claims, quotes being accepted or T&Cs like Exclusions will be crucial – as will policy wording.

Here’s the word;

Insurance Europe has called on the European Commission (EC) to withdraw its Artificial Intelligence Liability Directive (AILD), arguing that it would create legal uncertainty and discourage innovation. While appreciating the EC’s commitment to facilitating compensation for damages involving AI, the current proposal – the federation argues – could increase compliance burden for businesses and create confusion among consumers about their rights.In its response published today, Insurance Europe argues:

1. The proposed AILD framework, if adopted, could create legal uncertainty, rather than increasing consumer protection. This is because its scope of application and interplay with the EU’s AI Act and the revised Product Liability Directive (PLD) is unclear, resulting in an increase in compliance burden for businesses and in confusion at the side of consumers, about their rights.
2. With the enhanced evidentiary burden placed on AI providers and users, the proposal in its current form would also harm, rather than support, innovation. Including vague evidentiary thresholds will increase the likelihood of litigation, which will – in addition to disincentivising AI providers and users from innovating – deter insurers from providing cover.
3. If the proposal is maintained and an eventual review – five years after its transposition – favours mandatory insurance, contractual freedom should be maintained now and in the future. Mandatory insurance can only work for mature and homogenous markets. This is not currently the case. Insurers can only support AI innovation within a framework guaranteeing contractual freedom.

In its response, it identifies, ‘areas of the proposal that should be reconsidered, if the proposal is maintained, to preserve legal certainty, competitiveness, and encourage innovation, to the ultimate benefit of European consumers’.