When One AI Model Fails Many Companies at Once
Cyber insurance works because losses across a book are mostly independent. One insured suffering ransomware tells you little about the next, so a portfolio of many policies is more predictable than any single one. Shared AI dependencies break that assumption in a specific way. Where a large share of a book depends on the same foundation model or the same inference infrastructure, a single failure produces simultaneous claims across insureds with no commercial relationship to each other.