Enterprise Tech with Fexingo · 2026-07-24 · 10 min
Episode 130 of Enterprise Tech with Fexingo. Lucas and Luna break down a new clause appearing in Fortune 500 software procurement contracts: requiring vendors to carry specific insurance for losses caused by AI model outputs. They walk through a concrete example from a financial services firm that demanded a $50 million errors-and-omissions policy covering model hallucinations, biased recommendations, and IP infringement from training data. Lucas explains how the insurance requirement shifts negotiation leverage - vendors with mature AI governance get lower premiums, while startups face a cost barrier. Luna highlights the irony that insurers themselves are struggling to underwrite this risk because there's no actuarial data. The hosts also discuss how the clause interacts with existing indemnification terms and liability caps. A timely episode for anyone involved in enterprise software procurement, AI governance, or vendor risk management.
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