An article in our Plugged In tech and life sciences series

By Mitchell Foster II, Chief Underwriting Officer for Technology and Life Sciences

In a very short time, artificial intelligence has gone from being a futuristic concept to a force reshaping how businesses operate across nearly every industry. One survey reports that 78% of organizations now report using AI in at least one business function — up from 55% just a year earlier.*

For insurance agents, this highlights the need to stay informed on AI trends, and how their clients implement AI in their own operations. The agents who grasp the nuances and unique exposures tech companies in different segments face will be best positioned to help their clients navigate these evolving risks. 

Info tech: Automation with new risks

In the information technology sector, developers increasingly rely on AI-powered tools to generate code, identify bugs, and produce technical manuals. Generative AI has also seen increasingly wide use in research, education, programming and content production. 

Electronics manufacturing: Enhanced precision, new vulnerabilities

Manufacturers are integrating AI into production lines to control temperature and timing and manage inventory. Plus, with the ability to identify microscopic flaws that a human inspector might miss, AI is being used to inspect circuit boards, solder joints and other components for defects.  

Telecom: Smarter networks, higher stakes

Telecommunications providers are using AI to allocate bandwidth, predict network congestion and automate fault resolution. AI-powered chatbots often handle routine inquiries in customer service, while cybersecurity systems monitor for signs of malicious activity.

Building a proactive risk management strategy

For tech companies in all segments, a reliance on AI demands a robust risk management framework. Agents can deliver value to their tech clients by encouraging a structured approach to risk, with a focus on five key areas:

1. Data management - Organizations should implement encryption, access controls and bias mitigation strategies to ensure the integrity and fairness of AI systems.
2. Cybersecurity - Regular vulnerability testing and investment in advanced threat detection are essential to protect AI infrastructure from external attacks, including data spoilage.
3. Compliance and legal oversight - Maintaining audit trails and ensuring adherence to industry regulations will help clients avoid legal exposure as AI use expands.
4. Continuous monitoring - AI systems should not operate in isolation. Human oversight is necessary to validate outputs and intervene when anomalies occur.
5. Employee training - Staff must be educated on the capabilities, limitations and necessary safeguards of AI tools to ensure appropriate usage.  

Coverage that evolves with technology

In addition to proactive risk management, clients should maintain a professional and cyber liability policy that includes a broad definition of their services and deliverables. This ensures that, as AI evolves, their coverage remains robust and relevant.

By partnering with a carrier such as The Hanover, agents can provide access to both tailored coverage and actionable risk management strategies—helping clients proceed with confidence in an era of rapid technological change.

About the author

Mitch has more than 20 years of experience in the insurance industry, specializing in technology and life sciences over the past decade. He has held various underwriting leadership roles throughout his career. In his current role, Mitch is responsible for The Hanover's national strategy and appetite for technology and life sciences.

*Source: McKinsey's 2024 Global Survey on AI