Major insurance companies are pulling back from covering AI-related risks. Why? The potential for claims running into billions of dollars is getting too real to ignore.

Think about it - as AI systems get deployed everywhere from autonomous vehicles to medical diagnostics, one major failure could trigger massive liability issues. Insurers aren't ready to bet on those odds.

What's driving this retreat? The unpredictability factor. Unlike traditional risks that actuaries can model with decades of data, AI failures are still largely unknown territory. A single algorithmic mistake could cascade across thousands of systems simultaneously.

Some carriers are hiking premiums by 300-500% for AI coverage. Others are just walking away entirely. The message is clear: the insurance industry sees something the tech world might be downplaying.

For Web3 builders integrating AI into DeFi protocols or trading algorithms, this should raise eyebrows. If traditional finance won't touch this risk, maybe decentralized insurance protocols will find their moment.