“There’s a lot of pending litigation right now with regards to copyright infringement and fair use… the cost to defend one of these lawsuits can have dire repercussions for any business”

MATT JONES, CRC GROUP

“You’ve got to make sure that you’re investing in the human capital to fact-check and confirm and determine the authenticity of all of the content before it’s published”

EMILY CARON, SKYWARD SPECIALTY INSURANCE

“We have to start out by asking the question, ‘Are you using AI in developing your content?’ If the answer is yes, then that opens the door to, ‘Are you getting these cleared?’”

Regina Williams, Skyward Specialty Insurance

In Partnership with

Artificial intelligence: impact on media companies

Groundbreaking though it is, AI has created a wealth of challenges for those producing media content. As a special roundtable discussion heard, having the right insurance coverage is key

Read on

Regina Williams

Skyward Specialty

Emily Caron

Skyward Specialty

Nelson Hsieh

Greenan, Peffer, Sallander & Lally LLP

Matt Jones

CRC Group

Industry experts

THE ARRIVAL of artificial intelligence (AI) in our lives is a game changer and will undoubtedly revolutionize the way we live, not least through its use within the media world. Yet AI is nothing if not controversial, and its transformational impact brings fresh challenges for those working within this arena, as highlighted at a special roundtable discussion hosted by Insurance Business America, in association with Skyward Specialty, a rapidly growing specialty insurance company. The scale of AI’s growth was outlined by broker Matt Jones, from CRC Group, who is director of its professional executive group. CRC provides insurance expertise spanning commercial, group, individual, and specialty programs.

“This has now become a multi-billion-dollar industry with regards to the media and entertainment space,” Jones said. “Generative AI is now being used across so many different platforms to create content such as music, images, scripts, game development, movie production, advertising, just to name a few. The companies which are implementing AI all have the goal of operating more efficiently, reducing costs, boosting productivity, with the end result being to enhance the consumer experience.” Despite its multiple benefits, using AI can be hugely problematic, Jones warned. “There’s a lot of pending litigation right now with regards to copyright infringement and fair use,” he said. “Whether it’s intentional or not, the cost to defend one of these lawsuits can have dire repercussions for any business.”

The accuracy of the content – or otherwise – means there are key underwriting implications, noted Regina Williams, Skyward Specialty’s senior vice president & head of media liability. “We have to start out by asking the question, ‘Are you using AI in developing your content?,’” Williams said. “If the answer is yes, then that opens the door to, ‘Are you getting these cleared? Are you checking everything to make sure it’s accurate?’ We have to do that in order to protect not just the insured but the insurance company, and to make sure that we are doing our due diligence in writing a good company that’s doing its due diligence in making sure that the content is accurate.” Accuracy relies on the data fed to AI – and therein lies a systemic challenge, observed Nelson Hsieh, a partner at Greenan, Peffer, Sallander & Lally LLP. Hsieh provides specialist counsel for insurers on a variety of third-party and first-party coverages and policies.

“If you limit it too much, then it’s not learning very well,” said Hsieh, “but if you give it unfettered access to everything, you’re going to have all the issues. You’re going to feed it all kinds of conspiracy theories, all kinds of stuff that’s not proven, all kinds of stuff that’s being debunked. Right now, AI is not good at distinguishing the good stuff and the bad stuff. “You may inadvertently feed in information that is ill-gotten, infringing on somebody else’s intellectual property, or it could be subject to privacy concerns. Once you get the information, you also have to protect it. It could be subject to hacks, so that’s another area of potential risk, but the main area of risk for media companies is how they use AI – the output. “AI abhors a vacuum. So, if it doesn’t know, instead of saying, ‘I don't know,’ it’ll say something, and a lot of the times that something is wrong. So, that creates all kinds of issues, such as defamation and breach of privacy.”

Emily Caron, vice president of media liability claims at Skyward Specialty, agreed that while the technology holds promise, it also presents risks. Generative AI – artificial intelligence that can create original content, such as text, images, video, audio, or software code, in response to a user’s prompt or request – has revealed “a landmine of problems” that’s unfolding in real time, she said. It’s a particular risk in journalism. “AI is not great at reporting facts,” Caron explained. “So, that is where I think a lot of newsrooms are really putting the brakes on. It continues to get better as people use it; however, it is still fraught with lots of problems. What kind of content goes into the algorithm is going to directly impact what kind of stuff comes out of it – so if it’s garbage in, it’s garbage out. Hopefully, we will begin to see that the output is being improved as time goes on.”

Litigation has arisen from audio and video compilations created by AI, where the end product might closely resemble real individuals, Caron pointed out. “You can have invasion of privacy, the misappropriation of likeness, false product endorsement, and then – even more problematic – deepfakes involving celebrities but also deepfakes involving regular people,” she outlined. “You can have revenge items, where people are creating deepfakes out of spite. The potential for this type of realistic replication of real people is something to really monitor closely.” Potential discrimination bias is an issue too. A business could use AI to target an employment advertisement to exclude certain demographics – and so too could someone who wanted to prevent a particular group of people from renting their apartment. “Obviously, it’s not hard to see that as very problematic,” said Caron. So, bearing all these risks and potential outcomes in mind, what insurance coverage should brokers be recommending to clients to protect against liability in this market?

Williams favoured media professional, cyber, ENO (errors and omissions), and general liability policies. “They need to probably be consulting with counsel, putting in some guidelines to protect themselves a little bit,” she advised, and went on to explain that most carriers are not excluding the opportunities created by AI, and are still providing insurance. Jones added: “If they’re involved in music publishing, obviously they need a music ENO policy, and that would include artists, businesses that own rights catalogues of music, record labels, etc. If they’re creating content, obviously they need a media liability policy, and obviously these policies include coverage for copyright trademark infringement, without having any AI limitations or exclusions.” Hsieh noted: “If you’re using it to make any kind of decisions; for instance, if you’re using it for HR decisions, you probably need some kind of EPL (employment practices liability) coverage.”

Fact-checking is key, too, Caron suggested. “You’ve got to make sure that you’re investing in the human capital to fact-check and confirm and determine the authenticity of all of the content before it's published to the public," she advised. Jones emphasized the importance of businesses having good practices in place. “Just like most companies have an employee handbook, they can create AI written guidelines, produced with the help of an IT attorney,” he said. “Once implemented, it’s absolutely important to ensure that those guidelines are being followed.”

Issues may also arise where generative AI is tasked with creating content that is like something else. “If you ask AI to create the music in the style of somebody who’s been long dead, say Bach, all of his music is public domain,” Hsieh explained. “So, you don’t have much of a problem, and AI is very good at doing that. On the other hand, if you ask AI to create something in the style of someone who’s alive, you may have a problem, because their music is not in the public domain, and depending on how substantially similar the music created is, you may have an infringement issue.” To date, machine-generated content has not generally been considered copyrightable, Jones observed. “I think that is still kind of an open question as the courts work their way through these issues,” he said, and concluded: “This is going to be a very interesting next 5 to ten years, certainly.”

Skyward Specialty is a rapidly expanding and highly innovative specialty insurance company, delivering commercial P&C products and solutions on a non-admitted and admitted basis. The company operates through eight underwriting divisions – accident & health, captives, global property & agriculture, industry solutions, professional lines, programs, surety, and transactional E&S (excess & surplus lines). Its experts dig deeper to customize solutions that help brokers and agents deliver impactful solutions to their clients. It operates at the complex end of the specialty market and leverages technology to bring disruptive, innovative insurance solutions to market.

There is no doubting Matt Jones’ expertise – he has spent more than 19 years at CRC Group, located in Scottsdale, AZ, and is currently director – professional executive group. Jones specializes in placements for music E&O (errors and omissions), media liability, and film & program producers. His wide knowledge of the media landscape also covers an impressive insight into podcasts and authors; D&O (directors’ and officers’ liability), EPL (employment practices liability), and cyber are included in his brief.

CRC Group

Matt Jones

With some 30 years of experience as coverage counsel for insurers on a variety of third-party and first-party coverages and policies, Nelson Hsieh’s expertise includes tech, cyber, specialty E&O (errors and omissions), media, EPL (employment practices liability), D&O (directors’ and officers’ liability), and CGL (commercial general liability), as well as excess and umbrella polices. Hsieh also helps insurers draft and update their policies, endorsements, and applications. Prior to his current role as partner at Greenan, Peffer, Sallander & Lally LLP, he was associate attorney at Cooper, White & Cooper LLP.

Greenan, Peffer, Sallander & Lally LP

Nelson Hsieh

As an attorney with nearly 20 years of experience in handling media claims, Emily Caron, vice president, media liability claims at Skyward Specialty, is highly regarded within the media law community. Her expertise spans specialty media insurance, intellectual property, privacy, and First Amendment law. Caron’s depth of knowledge in claims management is enhanced by her background as a professional journalist – indeed, she holds an undergraduate degree in journalism and a juris doctorate with a certificate in media law and policy. In addition to her claims work, she has also worked in private practice as a litigator and as a judicial law clerk.  

Skyward Specialty

Emily Caron

Based in Kansas City, MO, Regina Williams is an industry veteran with an impressive background, having spent more than 20 years specializing in media liability. During her illustrious career, she worked for key industry names such as Media/Professional Insurance, First Media Insurance, OneBeacon, and Intact Insurance, before taking her current role as senior vice president & head of media liability at Skyward Specialty. Her knowledge of risk in the media world is matched only by her passion for the subject.

Skyward Specialty

Regina Williams

Artificial intelligence: impact on media companies

Groundbreaking though it is, AI has created a wealth of challenges for those producing media content. As a special roundtable discussion heard, having the right insurance coverage is key

Read on

Matt Jones

CRC Group

Nelson Hsieh

Greenan, Peffer, Sallander & Lally LP

Emily Caron

Skyward Specialty

Regina Williams

Skyward Specialty

Industry experts

Skyward Specialty

Regina Williams

Skyward Specialty

Emily Caron

Greenan, Peffer, Sallander & Lally LP

Nelson Hsieh

CRC Group

Matt Jones

In Partnership with

Artificial intelligence: impact on media companies

Groundbreaking though it is, AI has created a wealth of challenges for those producing media content. As a special roundtable discussion heard, having the right insurance coverage is key

Read on

Matt Jones

CRC Group

Nelson Hsieh

Greenan, Peffer, Sallander & Lally LP

Emily Caron

Skyward Specialty

Regina Williams

Skyward Specialty

Industry experts

Skyward Specialty

Emily Caron

Greenan, Peffer, Sallander & Lally LP

Nelson Hsieh

CRC Group

Matt Jones

Skyward Specialty

Regina Williams

Published October 7, 2024

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Risks covered by media liability insurance

Defamation

Invasion of privacy

Breach of duty or confidentiality

Plagiarism

“AI is not good at distinguishing the good stuff and the bad stuff. You may inadvertently feed in information that is ill-gotten, infringing on somebody else’s intellectual property”

Nelson Hsieh, Greenan, Peffer, Sallander & Lally LLP

Games developers

Film production

News outlets

Advertising

Music production

BUSINESSES THAT COULD BENEFIT FRoM AI MEDIA LIABILITY COVERAGE