Farm Insurance Australia :: News
SHARE

Share this news item!

Potential AI Errors: A Looming Challenge for Insurers

Potential AI Errors: A Looming Challenge for Insurers

Potential AI Errors: A Looming Challenge for Insurers?w=400

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

Industry experts are signaling a potential risk for underwriters due to claims arising from inaccuracies produced by artificial intelligence (AI), likening it to the "silent cyber" phenomenon of the past.
Clyde & Co partner, Darryl Smith, highlights the issue, emphasizing how AI inaccuracies could impact various insurance policies, sometimes without immediate detection.

The comparison to "silent cyber" recalls previous instances when insurers faced substantial losses because cyber incidents like ransomware were unintentionally covered by non-cyber policies. Mr. Smith advises that policy proposal and renewal forms should scrutinize the use of AI by asking specific questions about its application and purpose.

While AI is becoming integral to a wide array of professional services, its reliability varies, and errors can lead to significant insurance claims. These concerns mirror those previously seen with cyber risks, and although solutions such as exclusions might deter policyholders, they could also lead to new opportunities for tailored coverage solutions.

The potential vulnerabilities mainly threaten professional indemnity and errors and omissions policies, as errors often remain unnoticed for extended periods, potentially intensifying the impact of claims. Furthermore, directors’ and officers’ policies may also face risks of claims related to intellectual property breaches, defamation, or misuse of personal information.

In the future, the insurance sector might evolve to establish dedicated AI policies, minimizing unforeseen exposures similar to the asbestos precedent, which, despite not receiving any premiums, resulted in substantial costs to insurers. AI remains a pervasive factor within numerous organizations, and any associated errors could lead to significant claims.

In navigating this landscape, insurers are encouraged to proactively address these issues and explore new insurance policy structures to safeguard against unanticipated AI-related claims.

Published:Thursday, 24th Apr 2025
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Insurance News

Australian Insurance Premiums Set to Soar Amid Rising Demand
Australian Insurance Premiums Set to Soar Amid Rising Demand
26 Jan 2026: Paige Estritori
The Australian general insurance industry is on a trajectory of significant growth, with direct written premiums projected to surpass $144 billion by 2029. This forecast reflects a compound annual growth rate of approximately 4.7% from the $94.7 billion recorded in the previous year. - read more
Comprehensive Professional Indemnity Insurance Now Available for Australian Tradies
Comprehensive Professional Indemnity Insurance Now Available for Australian Tradies
26 Jan 2026: Paige Estritori
Hutch Underwriting has recently unveiled enhanced professional indemnity (PI) insurance policies specifically designed for Australian tradespeople. These new offerings aim to provide comprehensive coverage by integrating advice, design, and incidental cyber exposures into a single solution. - read more
Rising Construction Costs Impact Insurance Claims in Australia
Rising Construction Costs Impact Insurance Claims in Australia
26 Jan 2026: Paige Estritori
The Australian construction industry is currently facing significant challenges, including escalating material costs and a shortage of skilled labour. These issues are contributing to increased insurance claims costs, affecting tradespeople and insurers alike. - read more
Significant Reduction in Farm Liability Claims Reflects Enhanced Safety Practices
Significant Reduction in Farm Liability Claims Reflects Enhanced Safety Practices
25 Jan 2026: Paige Estritori
Recent data from WFI Insurance indicates a substantial 75% decrease in farm liability claims over the past year, suggesting that Australian farmers are adopting more effective safety measures. This decline is particularly notable in incidents involving falls from height, which have reached their lowest level in four years. - read more
Heightened Road Risks During Holiday Season Due to Increased Freight Traffic
Heightened Road Risks During Holiday Season Due to Increased Freight Traffic
25 Jan 2026: Paige Estritori
As Australia enters the summer holiday season, insurers and transport specialists are raising alarms about heightened road risks resulting from the convergence of increased freight activity and holiday travel. This period sees a significant uptick in both passenger vehicles and heavy trucks on the roads, amplifying the potential for accidents and safety incidents. - read more
Celebrating Excellence: 2025 National Trucking Industry Award Winners
Celebrating Excellence: 2025 National Trucking Industry Award Winners
25 Jan 2026: Paige Estritori
The Australian Trucking Association (ATA) has proudly announced the recipients of the 2025 National Trucking Industry Awards, recognizing outstanding contributions and achievements within the sector. These awards highlight the dedication and excellence of individuals and organizations that drive the industry forward. - read more
Australian Insurers Achieve $6.1 Billion Profit in 2024
Australian Insurers Achieve $6.1 Billion Profit in 2024
25 Jan 2026: Paige Estritori
In 2024, Australia's insurance industry recorded an after-tax profit of $6.1 billion, a significant increase from the five-year average of $2 billion. This surge is primarily attributed to substantial premium hikes and a reduction in severe weather events. - read more
Premiums Decline in Australian Construction Insurance Market
Premiums Decline in Australian Construction Insurance Market
25 Jan 2026: Paige Estritori
Australia's construction insurance market has entered a softer phase in 2025, with premiums decreasing across various lines due to heightened competition among insurers. According to Marsh's Construction Insurance Market Update 2025, premium reductions averaged between 5% and 15% in the first half of the year. - read more
Labour Shortages and Supply Chain Issues Elevate Insurance Claims Costs
Labour Shortages and Supply Chain Issues Elevate Insurance Claims Costs
25 Jan 2026: Paige Estritori
In 2025, Australia's insurance industry is grappling with rising claims costs, particularly within the construction sector, due to labour shortages and supply chain disruptions. Crawford & Company's latest Claims Inflation Update highlights that construction expenses are increasing at a rate faster than general consumer prices, with the Building Cost Index (BCI) rising nearly 5% annually. - read more
Envest Group Unveils TLI Underwriting: A New Era for Heavy Motor Fleet Insurance
Envest Group Unveils TLI Underwriting: A New Era for Heavy Motor Fleet Insurance
24 Jan 2026: Paige Estritori
Envest Group, a prominent player in Australia's insurance sector, has announced the launch of TLI Underwriting, a new agency dedicated to providing specialised insurance solutions for heavy motor fleet operators. This strategic move aims to address the unique challenges faced by larger transport businesses in Australia. - read more


Farm Insurance Articles

What Australian Farmers Should Know About Crop Insurance
What Australian Farmers Should Know About Crop Insurance
Crop insurance is a type of insurance policy designed to protect farmers from the financial losses that arise from damages to their crops. This could be due to various risks, including adverse weather conditions, pests, and diseases. - read more
Investing in Your Farm's Legacy: Estate Planning and Farm Insurance Combined
Investing in Your Farm's Legacy: Estate Planning and Farm Insurance Combined
Farming is much more than an occupation; it's a way of life and a heritage that often spans generations. In today's ever-evolving agricultural landscape, embracing modern practices while preserving your farm's future has never been more crucial. Estate planning emerges as a pivotal strategy for safeguarding your agricultural legacy, ensuring that your hard-earned investments and the land you hold dear are passed on according to your wishes. - read more
Insurance for Hobby Farms: Finding the Right Coverage
Insurance for Hobby Farms: Finding the Right Coverage
Hobby farming has become increasingly popular in Australia, with many individuals and families embracing the joys of growing their own produce, raising livestock, and enjoying a rural lifestyle. Whether it's a small vegetable garden, a few chickens, or a larger mixed farming operation, hobby farms offer both relaxation and a connection to nature. - read more
The Modern Farmer's Checklist for Assessing Farm Equipment Insurance Needs
The Modern Farmer's Checklist for Assessing Farm Equipment Insurance Needs
As the backbone of Australian agriculture, farm equipment plays an essential role in day-to-day operations across our expansive and diverse landscapes. From the vast wheat belts to the tropical fruit farms, machinery ensures efficiency and productivity in the face of constant challenges. But with reliance on such equipment comes significant risk—the financial burden of damage or loss can be devastating to a farmer's livelihood. - read more
Protecting Your Herd: The Aussie Farmer's Guide to Livestock Insurance
Protecting Your Herd: The Aussie Farmer's Guide to Livestock Insurance
For Australian farmers, livestock is more than just a vital asset; it's the heartbeat of their livelihood. In a land where the sunburnt plains are as relentless as they are beautiful, protecting your herd isn't just a duty; it's a necessity. That's where livestock insurance comes into play—a shield against the unpredictability of Mother Nature. - read more
5 Essential Farm Insurance Policies Every Australian Farmer Needs
5 Essential Farm Insurance Policies Every Australian Farmer Needs
Farming in Australia is not just a job, it's a way of life. However, it’s also a livelihood that comes with its own unique set of risks. From unexpected weather events to machinery breakdowns, the life of an Australian farmer is fraught with uncertainties. - read more
From Droughts to Floods: Understanding Weather-Related Coverage in Farm Insurance
From Droughts to Floods: Understanding Weather-Related Coverage in Farm Insurance
Australian farmers face a unique set of challenges due to the vast and varied climate conditions that sweep across the continent. From the scorching heat and prolonged droughts of the Outback to the tropical storms and torrential rains of the northern regions, weather-related risks are an integral part of agricultural life in Australia. - read more
Common Pitfalls to Avoid When Insuring Your Farm Equipment
Common Pitfalls to Avoid When Insuring Your Farm Equipment
In the world of agriculture, having the right insurance coverage is essential. Farming is a high-risk industry that deals with unpredictable elements, and insuring your farm equipment can safeguard your livelihood. - read more
How to Safeguard Your Farm: A Guide for Australian Farmers
How to Safeguard Your Farm: A Guide for Australian Farmers
Farming is inherently risky. With factors like weather, pests, and market fluctuations affecting crops, it's crucial to manage these risks effectively. - read more
Risk Management and Insurance Options for Farmers
Risk Management and Insurance Options for Farmers
Risk management is the practice of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. In farming, risk management involves various strategies to protect the financial health and operational stability of the farm. - read more


Need a Quote?
Start your free farm insurance quote comparison here.
Farm Type:
Postcode:

All quotes are provided free and without obligation by a Specialist from our National Broker referral panel. See our Privacy Statement for more details.


Knowledgebase
Incontestability Clause:
A provision in a life insurance policy that prevents the insurer from voiding coverage due to a misstatement by the insured after a certain period.