Insurability and Liability for AI-Caused Harms

The opacity of AI decision-making has led many tort scholars to conclude that ordinarily it will be infeasible to prove negligence or defect-based forms of products liability for AI-caused harms. According to mainstream tort theory, this evidentiary hurdle justifies strict enterprise liability for commercial AI distributors. Fully internalizing injury costs within these business enterprises adequately incentivizes them to adopt reasonably safe practices while relying on their liability insurance policies to efficiently and fairly compensate accident victims. Mainstream theory, however, decisively biases the analysis in favor of strict enterprise liability by not accounting for how the expansion of liability would substantially increase the cost of compensating injuries through insurance mechanisms.

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