• by Ray Schultz , Columnist, 7 hours ago

Publishers and others have to watch out for new forms of liability they couldn’t have imagined a few years ago—all because of AI. 

For instance, two recently-passed state bills would require advertisers to disclose when AI-generated individuals appear in ads and prohibit the commercial use of digital replicas of deceased personalities, says Jason Bishara, financial lines practice leader at NSI Insurance Group.

AI is creating “a whole new context to media liability,” Bishara explains. Case in point: “What does it mean to use the likeness of somebody else, or utilize ads to create digital assets” such as NFT? 

All this is uncharted territory. “From my world, we don’t know how to underwrite it,” he adds. “The underwriters don’t know to underwrite it.”

Bishara offers a hypothetical example. Suppose someone uses Marilyn Monroe’s image to sell marijuana. That might be construed as defamation to her legacy.  

That would be a new threat—it has long been held that you cannot defame a dead person. 

But that’s only one possible risk for publishers. “ If people are creating items publishers are putting out and they’re not verifying the information,” that could create liability.

Bishara understands that journalists are not supposed to use AI to write. But he argues that “every journalist is using it,” if only to curate. And people are using it in many sectors. 

“Watch what these kids are doing—25, 26, 28 years old,” Bishara says. “We were doing some complex financial modeling, a little wonky, and it needed some cleanup, It would have taken me a month to create it, they spit it out in a few minutes.”

Of course, that capability is dangerous—clients may not want their data being put into such  documents.  

Then there’s the administration’s effort on removing AI regulation for nuclear energy.  The trouble is that this will require untold amount of energy. “We’re going to have to get behind nuclear energy and facilitate nuclear waste.”

These liabilities are “very big, transformative,  Bishara continues. “It would crush underwriters and insurance companies.” But as the premiums go up, more carriers will come into market. 

Granted, no lawsuits have been filed to test these new forms of exposure. But there will be. “Lawyers follow the money,” Bishara observes. “They’ll go after it if it’s there—there’s meat on those bones.” 

What timeline does he foresee? “Three or four months, a year or two at the most.” 

Given that, does Bishara have any advice for publishers and digital marketers?

“Here’s a risk manager’s answer: To free your risk, transfer the risk,” he says. “It’s my decision to use it, but the second I pull someone else into it—an attorney, an account, an ad agency—I’m sharing the risk and transferring it off me and onto them.”