AI and Deepfakes: Emerging Risks in Commercial Insurance

As artificial intelligence (AI) continues to evolve at a rapid pace, so too do the risks associated with it. One of the most concerning developments in recent years is deepfake technology — AI-generated content that can convincingly mimic real people’s voices, faces or actions. While deepfakes started as novelty entertainment, they’ve quickly become a serious threat in the world of cybersecurity and commercial liability.

What Are Deepfakes?

Deepfakes use machine learning algorithms to create hyper-realistic but entirely fake images, videos or audio. These can be used to impersonate business leaders, manipulate public perception or commit fraud. For example, a deepfake video of a CEO making a false statement could tank a company’s stock, damage its reputation or lead to legal consequences.

Why Should Businesses Be Concerned?

As deepfakes grow more sophisticated, they pose a serious threat to businesses of all sizes. Here are just a few ways deepfake content can impact your operations:

• Reputation Damage: A falsified video of an executive making offensive or misleading comments could go viral, causing PR crises and lost business.
• Financial Fraud: Cybercriminals have already used deepfake audio to impersonate CEOs and trick employees into transferring funds or disclosing sensitive information.
• Legal Liability: If a deepfake is believed to be real and causes harm, a company could face lawsuits, especially if they are perceived to be the source of the content or failed to address it properly.

Commercial Insurance and Deepfake Risk

As these risks grow, commercial insurance policies must adapt. Here’s how the rise of AI and deepfakes intersects with two major types of business insurance:

1. Commercial General Liability (CGL) Insurance

Traditional general liability policies typically cover bodily injury, property damage and advertising injury (like libel or slander). But when it comes to deepfakes, coverage can get murky. If a deepfake video attributed to your company defames someone or damages another business, your CGL policy
might apply — but many insurers are beginning to limit coverage for AI-related exposures due to the complexity and growing frequency of these incidents.

2. Cyber Liability Insurance

Deepfakes fall squarely into the realm of cyber risk. A strong cyber insurance policy can offer protection against the financial fallout of a deepfake-related fraud, breach or reputational attack. However, not all policies explicitly include deepfake scenarios, so it’s critical to work with an insurance provider that understands this evolving threat landscape.

Staying Ahead of the Curve

To protect your business from the emerging risks posed by AI and deepfake technology:

• Review your current insurance policies to identify gaps related to cyber threats and reputational risk.
• Invest in cybersecurity training to help your employees recognize deepfake scams.
• Work with a knowledgeable insurance agency that stays up to date with the evolving AI and cyber landscape.

AI and deepfake technology aren’t just science fiction—they’re here, and they’re changing the way businesses manage risk. As these threats continue to evolve, so should your insurance coverage. Don’t wait until your business is the target of a deepfake incident to find out you’re not protected.

The Secret Insurance Agency is here to help you stay ahead of the curve. Contact us today to review your commercial and cyber liability coverage.