Chaucer, a global specialty insurance and reinsurance group, has teamed up with Armilla AI to launch a new standalone third-party liability (TPL) insurance product aimed at tackling the unique risks posed by AI technologies.
The collaboration aims to address the growing concerns around mechanical underperformance in AI systems and the legal liabilities that can arise from such failures.
As AI adoption surges, Chaucer and Armilla AI have partnered to launch a specialized insurance product addressing evolving AI risks.
Merging Chaucer’s specialty insurance expertise with Armilla AI’s technical risk tools, the new TPL product protects US organisations from liabilities such as hallucinations, model drift, and mechanical failures.
It offers global coverage, legal defense, and liability protection. Building on their Lloyd’s Lab collaboration, this Chaucer-led initiative advances AI risk management, empowering businesses to innovate confidently without fear of unexpected AI behavior.
Tom Graham, head of partnership and innovation at Chaucer, said, “At Chaucer, we believe that AI is reshaping the risk landscape — and that requires fresh thinking from the insurance market. Our partnership with Armilla AI has enabled us to co-develop a product that not only recognises the complexities of AI underperformance but provides meaningful coverage that supports innovation, transparency, and accountability. This launch marks a pivotal step in how we insure the technologies of tomorrow.”
Armilla AI CEO Karthik Ramakrishnan added, “Partnering with Chaucer marks a major milestone in our mission to make AI safer for everyone. Our new AI liability coverage empowers organisations to adopt cutting-edge technology; while knowing they’re protected against the unique risks AI can bring. At Armilla, we’ve pioneered advanced methodologies to identify and mitigate AI-related vulnerabilities—from early development to deployment at scale. We’re putting these insights into action through robust insurance coverage, enabling organisations to adopt AI responsibly and confidently push the boundaries of innovation.”
Keep up with all the latest FinTech news here
Copyright © 2025 FinTech Global
