How employee and contractor AI use can create liability for employers: A guide for navigation
Corporate employees and contractors are increasingly using generative tools based on artificial intelligence (AI) in their work. Since legislation around the use of AI is still in its infancy, AI users are exposing companies to potential liability and, in turn, financial and reputational damage.
Areas of application of AI
Areas poised for significant adoption of (and disruption by) AI tools include media and entertainment, marketing and advertising, design, coding and engineering, graphic design, architecture, video games, and publishing, among countless others. The media, entertainment, video game, and marketing industries in particular face significant disruption as new tools and workflows allow financiers to cut costs, while the use of “digital replicas” in theory creates new avenues for talent to monetise their name and likeness and creative works.
While there remains some dissent as to just how quickly AI will disrupt traditional industries, there is consensus around one thing: The approaching tsunami of lawsuits arising from the use of artificial intelligence. Such suits will require intense scrutiny of contracts (particularly relating to representations and warranties, indemnification, and insurance provisions), website and app terms and conditions, and emerging new state and federal legislation as parties struggle to allocate liability for AI-related losses.
Do you need legal advice concerning AI’s impact on insurance? We have insight into this complex intersection of law.Christopher C. Loeber, Partner, Pryor Cashman LLP*, New York, USA
What companies should consider – a guide for navigation
The potential liability and legal risk for companies from the use of AI tools is a clear and present danger, and it is imperative that they act now. The experts at Pryor Cashman LLP* share tips on several best practices that all businesses should adopt immediately:
- Develop a clear understanding of how AI impacts your business
- Engage counsel to assist in mitigating AI-related risks, creating internal AI policies, and conforming existing business contracts to minimise AI-associated losses
- Engage insurance counsel to audit existing insurance policies and advise on future policy purchases and renewals
Would you like to find out more about the topic?
See full article…
For further information please contact:
Christopher C. Loeber, Partner, Pryor Cashman LLP*, New York, USA
Email: cloeber@pryorcashman.com
Simon Pulman, Partner, Pryor Cashman LLP*, New York, USA
Email: spulman@pryorcashman.com
*Ecovis cooperates with Pryor Cashman LLP (www.pryorcashman.com), a full-service, US-based law firm with offices in New York, Los Angeles and Miami.