AI performance guarantee product is being purchased by AI vendors to achieve the following goals:
- Differentiate from their competitors
- Build trust about their algorithm among buyers
- Provide a defined mechanism for risk transfer in the event of AI underperformance
Policyholders have a wide range of AI use cases as shown in the table below.
| AI Use Case |
Companies that bought AI Insurance |
| Cybersecurity |
Deep Instinct’s endpoint security software uses deep learning algorithms and it covers 3 million USD for each client upon successful undetected ransomware attack. |
| Battery analytics |
Twaice’s AI predicts the state of health of a battery without expensive physical tests. If the predicted state of health of the battery is off by 2%, their customers are guaranteed to receive 8 times the money they paid to Twaice. |
| Content moderation |
Spectrum Labs AI based content moderation tools detect harmful content on social media, e-commerce etc and it refunds a certain percentage of the subscription fee to the client. The clients are guaranteed this through a third party AI Insurance product. |
| Fraud prevention |
Fugu, a Series A company, uses AI to validate transactions for online sellers. If any of the accepted transactions are later found to be fraudulent, the seller is indemnified for the value of these transactions. |
