Source: The National Law Review

The National Law Review provides an in-depth analysis of the complex interplay between Artificial Intelligence, the legal doctrine of fair use, and the insurance market for intellectual property. The article examines the significant legal risks faced by companies developing and using generative AI, particularly the wave of lawsuits alleging copyright infringement from the unauthorized use of protected works to train AI models. A key defense in these cases is the assertion of fair use, but its application to AI is still a legally gray and untested area, creating substantial uncertainty for businesses and their insurers.

This uncertainty poses a significant challenge for the insurance industry. Underwriters must grapple with how to assess and price the risk of IP infringement litigation related to AI. The article explores the types of insurance policies that might offer coverage, such as media liability or errors and omissions (E&O) policies, and the specific language and exclusions that are becoming increasingly common. It discusses whether a "fair use" defense, even if ultimately unsuccessful, could trigger an insurer's duty to defend, and how the outcomes of current high-profile cases will shape the future of IP insurance for AI-related risks, potentially leading to higher premiums, new exclusions, or the development of specialized insurance products.