Insurance Won't Cover Your AI Mistakes Anymore | UnHacked Ep. 99
Hosts:
Justin Shelley - https://www.phoenixitadvisors.com/
Mario Zaki - https://www.mazteck.com/
Insurance companies are quietly excluding AI-related claims from cyber policies. If you're using AI in your business right now, you need to know this before renewal.
Justin Shelley - https://www.phoenixitadvisors.com/
Mario Zaki - https://www.mazteck.com/
Insurance companies are quietly excluding AI-related claims from cyber policies. If you're using AI in your business right now, you need to know this before renewal.
For the last 24 episodes, Justin Shelley and Mario Zaki have shown business owners how to use AI to save time and money. This week they hit pause on the excitement and looked at what's happening on the insurance side, because it's changing fast, and most business owners have no idea.
Insurance carriers are now excluding claims involving AI resume-screening tools that discriminate against candidates, even when the business owner never intended it to happen. They're also excluding "negligence" claims: if you vibe-coded your own system, put your business data into it, and something breaks or disappears with no hack involved, some policies are treating that as your fault, not a covered incident. Justin admits on the show that his own first vibe-coded project had zero real security in it and could have leaked data before he caught it.
They also break down the newest breach numbers most business owners haven't seen: the global average cost of a data breach is up 12% to $4.99 million, AI-enabled breaches jumped 56% year over year and now average $6 million, 43% of security incidents involved unapproved "shadow AI" tools, 70% of breached organizations had no AI governance policy at all, and 92% of organizations breached through AI systems lacked basic access controls.
This episode is short and direct on purpose: audit what you've built, then call your insurance agent this week.
What you'll learn:
- Why AI resume-screening tools can trigger discrimination claims your business liability insurance may no longer cover
- How "self-inflicted" data loss from vibe-coded systems is being excluded as negligence, even with no hacker involved
- The current breach numbers: AI-enabled breaches now average $6M, and 92% of AI-related breaches happened in systems with no basic access controls
- The exact three questions to ask your insurance agent about AI exclusions before your next renewal
- Why a tested backup and restore plan matters even more once AI or vibe-coded systems are running part of your business
New episodes drop every week breaking down cybersecurity and AI risk in plain English. Subscribe so the next "audit your business before it's too late" episode doesn't catch you off guard.
Need help figuring out where your business actually stands on AI and cybersecurity risk? Phoenix IT Advisors helps small and mid-sized businesses find these gaps before an insurance company or a hacker finds them for you. Visit PhoenixITAdvisors.com to schedule a consult.
Links:
- Full episode: https://unhackmybusiness.com/episode/99
- Free AI policy template & insurance question checklist: https://unhackmybusiness.com/episode/99
- Phoenix IT Advisors: https://phoenixitadvisors.com
- More UnHacked episodes: @UnHackedPodcast
Creators and Guests
Host
Bryan Lachapelle
Hi, I’m Bryan, and I’m the President of B4 Networks. I started working with technology since early childhood, and routinely took apart computers as early as age 13. I received my education in Computer Engineering Technology from Niagara College. Starting B4 Networks was always a dream for me, and this dream became true in 2004. I originally started B4 Networks to service the residential market but found that my true passion was in the commercial and industrial sectors where I could truly utilize my experience as a Network Administrator for a large Toronto based Marine Shipping company. My passion today is to ensure that each and every client receives top of the line services. My first love is for my wonderful family. I also enjoy the outdoors, camping, and helping others. I’m an active Canadian Forces Officer working with the 613 Fonthill Army Cadets as a member of their training staff.
Host
Mario Zaki
During my career, I have advised clients on effective – and cost-effective – approaches to developing infrastructure that fosters productivity and profitability. My work has provided me with a broad-based knowledge of business from the inside, with an expertise in areas that go beyond IT alone, ranging from strategic planning to cloud computing to workflow automation solutions.
