The Insurance of Things That Think

Traditional risk models assumed clear agency. A human directed a machine, and liability followed intent. 
If a forklift caused damage, the operator was liable. 
If software made an error, accountability rested with the company that deployed it. 

Autonomous systems disrupt that logic. When an algorithm decides to reprice inventory, approve a transaction, or dispatch a drone, there may be no single point of human intervention. The system acts based on learned behaviour, sometimes in ways even its creators cannot predict. 

Who, then, is the insured? 

• The owner who deployed the system? 
• The developer who wrote the code? 
• The user who benefited from the outcome? 

Or does liability sit with the algorithm itself — a non-human actor that can cause measurable loss but cannot bear responsibility? 

In the next decade, businesses will increasingly delegate decision-making to autonomous systems. Supply chains will optimise themselves. Accounting bots will initiate payments. Generative models will create contracts and negotiate terms. 

These cognitive agents will operate at speed, without fatigue or emotion but also without moral or contextual judgment. 
They will make choices that, while logical, may be reputationally or ethically disastrous. 

Imagine: 

• A trading bot executes a profitable transaction that inadvertently breaches sanctions. 
• A procurement algorithm chooses a supplier that uses forced labour, because its dataset missed human rights disclosures. 
• A logistics system reroutes emergency supplies away from a disaster zone to maximise efficiency. 

Each action is rational. Each creates exposure. 

The losses will not fit neatly within today’s insurance lines. Professional indemnity, cyber, and product liability were not built for self-modifying systems that act independently of their creators. 

Insurers are already exploring frameworks for autonomous decision risk — a blend of technology liability, data integrity, and operational governance cover. But the key challenge is attribution. 

Policies depend on cause and fault. Autonomy diffuses both. 

Future insurance may need to: 

• Treat AI systems as insurable entities, with their own risk profiles and behavioural histories. 
• Blend cyber and professional indemnity, recognising that digital agents perform advisory and operational roles simultaneously. 
• Expand D&O to cover decisions influenced or executed by algorithms under a board’s supervision. 
• Create dynamic pricing models that adjust premiums in real time based on AI performance metrics. 

In short, insurance will have to evolve from static protection to adaptive partnership. One that learns alongside the machines it covers. 

Boards will soon be judged not only on how they manage people, but how they manage intelligence both human and artificial alike.  

Policies will need to reflect oversight of algorithmic conduct, bias control, and transparency. Auditing an AI system may become as critical as auditing financial statements. 

The companies that lead will be those that understand: automation does not eliminate liability; it redistributes it. 

Governance, not technology, remains the foundation of resilience. 

The insurance of things that think is not science fiction. It is the next logical step in a world where cognition is outsourced. 

As autonomy expands, so too must foresight. The systems we design today will decide for us tomorrow. 

Insurance will follow, but leadership must precede it. 

Insurance evolves after catastrophe, but real resilience comes from anticipating blind spots before they break. 

The organisations that thrive in the cognitive economy will not be those who trust machines blindly, but those who build frameworks — legal, ethical, and insured — that make intelligence accountable. 

_{DISCLAIMER: This information is provided to assist you in understanding the risks, implications, and common considerations for your industry.  It does not constitute advice and is not complete. Please contact Knightcorp Insurance Brokers for further information.} 

_{DISCLAIMER: Third-Party Links: This article may contain links to external websites or content operated by third parties. These links are provided for your convenience and information only. Knightcorp Insurance Brokers does not endorse, approve, or accept responsibility for the content, accuracy, or security of any externally linked site.} 

_{Please note that any third-party websites are not covered by Knightcorp Insurance Brokers’ policies or procedures. We make no representations about the suitability of any information, product, or service contained on those sites for your needs. Use of third-party links is at your own risk, and we recommend reviewing their terms, conditions, and privacy policies.} 

_{For advice specific to your insurance needs, please contact your Knightcorp Insurance Brokers directly.}