Definition
A risk that standard business-interruption and cyber insurance policies weren't designed for outages that hit many companies at once because they all depend on the same handful of AI vendors or models. If one major AI provider fails or is breached, dozens of unrelated companies could all file claims simultaneously — something typical policies don't price for.
Why it matters
Boards assuming existing insurance covers AI-related disruption may find gaps precisely when a shared-vendor failure hits many parts of the business at once.