AI-Specific Liability Carve-Outs in Vendor Contracts Shift Risk to Deployers
The trend of AI-specific liability carve-outs in vendor contracts means that buyers unknowingly hold the risk – a fact most discover only in a validation review.
As healthcare, insurance, and financial services executives and decision-makers, you are aware that your organisations rely heavily on artificial intelligence (AI) solutions. In regulated industries like Canada and the UK, you have come to trust AI in areas such as patient diagnosis, risk assessment, and predictive maintenance. However, do you know the true extent of your exposure when it comes to these technologies?
The introduction of AI-specific liability carve-outs in vendor contracts has shifted the risk from vendors to buyers, leaving organisations like yours vulnerable to unexamined AI decisions. This means that if an AI system does not perform as claimed or causes harm to patients or customers, you may be held accountable for its actions and consequences.
This is a pressing concern because these solutions can cause irreversible damage. For instance, in healthcare, incorrect diagnoses can lead to mismanagement of patient care, unnecessary treatments, and even death. In insurance, poor risk assessments can result in financial losses, while in finance, AI-driven investment decisions may produce devastating consequences for your customers.
To mitigate this risk, it is crucial that you examine the capabilities of these AI solutions before deployment. However, this task can be challenging due to the vendor’s information asymmetry – the fact that they have a vested interest in the sale and often hide behind marketing claims and technical jargon. Internal teams may also be too close to the decision-making process, making it difficult for them to objectively assess these claims.
That is where Straven & Co comes into play. The firm offers independent AI validation, helping organisations like yours make informed decisions about the adoption of AI solutions. Through its rigorous examination, Straven & Co tests proposed systems against real operations, people, governance obligations, and legal exposure, delivering a plain verdict: proceed, proceed with conditions, or do not.
By choosing to work with Straven & Co, you can ensure that your organisation is protected from the cost of an unexamined AI decision. With its expertise in independent validation, Straven & Co helps you avoid buying technology that does not do what was promised and deploying systems that your governance cannot defend when regulators, boards, or courts ask questions.
For more information on how Straven & Co can help your organisation navigate the complexities of AI adoption, please visit stravenandco.com.