Buying insurance for any frontier tech goes like this:
- your first customer or pilot requires coverage before your machine can work on their site
- a broker hands you an application written for ordinary businesses, and often will deny you on baseless "risks" (one of our clients got denied for using CAD software in their workflow)
- you get filed under something close or outright denied, the person at the insurance company often can't tell what they're looking at, and the safe answer is no
- if a quote does come back, the AI risk is often quietly removed by an add-on clause that prevents you from truly being covered
Those clauses surprised us. Insurance companies mostly don't write their own policies from scratch. They license standard forms from an industry body called ISO and attach add-on clauses to adjust them, and in January ISO published clauses that void coverage for losses arising out of AI in any part of a process. Each insurer decides whether to adopt them, account by account, and there's no public record of who has and to what capacity.
There's an open question in the wording too. It defines generative AI as systems trained on data that produce text, images, audio, video or code. Whether a robot's control model, which produces motor commands, falls under that is unsettled. We've asked underwriters, the people at insurance companies who make these calls, and gotten different answers across the board.
We didn't initially plan to be brokers. We came into YC to work in insurance and spent the first half of the batch on a wildfire risk model we wanted to sell to insurance companies. They liked it and wanted to build their own, which is the polite way to say no. While that was dying, a batchmate who launches satellites mentioned he couldn't get insured, and once we started asking around we kept hearing the same story from hardware companies. So we got licensed in a week and now can place coverage.
What we've built so far:
- a six-step application that asks about what you're building and drafts the structured version insurance companies like, omitting anything you didn't say
- a map of which insurers add the AI clauses, which will remove them, and which cover frontier companies on purpose
- when an insurer says no, you see their reason and what would change it, full transparency all the time
- a hands off process for companies trying to get fully covered
Here's a demo of the whole process: https://youtu.be/gVqCamTNH5E
On money: the insurance company pays us a commission when you get covered, usually 10-20% of what you are charged, and we charge you nothing on top (that's right, no brokerage fees).
Also, if you're a software company with ordinary needs, we'll still handle the whole process for you and get you the best policy we can find.
In the past week alone we have helped three companies get covered that were denied elsewhere. The companies include a robotics wholesaler and rental store, who had trouble getting covered earlier because some of their property uses AI (even though they never use it themselves), a bridge collision system that was getting denied because they use CAD software, and a tele-operating robotics service that needed coverage within a week for their first pilot.
If you're looking for insurance in any capacity feel free to reach out to me at alex@risklytics.ai or fill out an application at https://risklytics.ai. And if you work on the carrier side and think you'd wanna partner with us let us know.