As companies increasingly face litigation over their claims related to artificial intelligence, the risks for officers and directors are becoming more pronounced. This trend is exemplified by a derivative suit filed by a shareholder of Sprinklr, a company known for its customer engagement software. The lawsuit underscores the rising threat of personal liability for corporate officers and directors amidst the surge of AI-related legal actions.
Geoffrey Fehling, a partner at Hunton Andrews Kurth, advises that while many Directors & Officers (D&O) insurance policies will cover securities claims, policyholders must ensure their policies do not exclude AI-related losses. It’s crucial for organizations to revisit their insurance policies to confirm coverage specifics, particularly in the light of potential exclusions concerning AI and similar technologies.
The case against Sprinklr can be seen as a warning to companies about the potential legal ramifications of their AI-related activities. For more details on how this lawsuit highlights these issues, details are available from Corporate Counsel’s coverage.