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When AI quietly breaks things, who pays?

David Halbreich, an insurance recovery partner at Reed Smith, discusses how AI companies can address coverage gaps as the industry grows, including straddle claims between tail and go-forward D&O policies after a merger, governance disclosures in applications becoming warranties that insurers use to deny claims, and determining when the claim clock starts for slow-building model degradation.

read1 min views6 publishedSep 3, 2026

David Halbreich, an insurance recovery partner at Reed Smith, breaks down how AI companies should handle coverage gaps that come up as the industry grows. He covers straddle claims that fall between tail and go-forward D&O policies after a merger, how governance disclosures in applications can turn into warranties an insurer uses to deny a claim, who should sign off on AI use questions, when the claim clock starts for slow-building model degradation, and how … More

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