Is Information Generated by AI Covered by Your Insurance?

This episode explores the impact of AI on the insurance industry, business practices, and legal considerations, featuring insights from industry expert Pat Grigno.

keywords

AI, insurance, business, contracts, legal, technology, automation, risk management

key topics

• Impact of AI on insurance industry
• Legal and contractual considerations with AI
• AI's role in business efficiency and risk management

guest name

Pat Grigno

Sound Bites

• "AI is affecting all of us now"
• "AI can help draft better contracts"
• "Terrorism insurance costs vary by risk"

Chapters

00:00
The Impact of AI on Business and Insurance

11:18
Navigating AI in Contracts and Insurance Policies

15:27
Understanding Liability and Insurance in Unforeseen Events

Resources

• California Pool Association
• AI Contract Summarization Tools

Guest links

• LinkedIn

Transcript

SPEAKER_03 0:01

Good day, everybody, and welcome back to another episode with your host, Steve Sherwood. And as always, our guest, Pat Grino. So, Pat, thanks so much for coming on. We love having you. I want to talk today about the elephant in the room, baby. So, and look, whether you know it or not, like the world and the US as a country have been fucking around with AI for a while now, you know? And obviously the government has, you know, they're a couple decades ahead with whatever they have going on, right? But as a guy that's in my for in my early 40s, I come from an era where it was like the last nomad, right? Of like before the internet. Like I had, I lived a life before the internet, right? And there's a big timestamp in history of before the internet and after the internet. So my question to you, and what I want you to speak on today, is you know, is AI AI is affecting all of us? That's obvious, you know. Like uh I just read that the USPS has been sorting mail using AI for, you know, a long time now. But is there anything that's changed with the way that you do business, the way that you have to do business, as far as like having clients, having contracts, having the verbiage in there? Because I'm not gonna lie, like I will ask someone a question sometimes, and like the response that they give back, I'll be like, what the f what? You don't talk like like that. Is a chat the chat GPT answer. And I get that a lot of people use it and it's it's a great tool. And you know, people are really starting to use it in the in the pool environment too. But I want to talk a little bit more about insurance and how how you see this possibly affecting us. You know, how is it affecting us now and how is it possibly going to affect us in the future?

SPEAKER_01 2:00

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SPEAKER_00 3:42

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SPEAKER_03 4:09

I want to talk a little bit more about insurance and how how you see Chat GPT affecting us now and how is it going to affect us in the future? Yep. Yeah, yeah, I appreciate that.

SPEAKER_02 4:19

So I think uh from a high, high level, you know, for as an independent insurance agency, you know, we uh we don't feel like there's anything that's coming down the pike that's going to replace, you know, your relationship business with your financial advisor, your insurance agent, you know, the the people that you want of your, you know, CPAs and tax prep folks, like the people that you want to be able to sit down and ask, like, what would you do if you were me and you know, be able to have a trusted advisor relationship. You know, I think that the insurance agencies that are just a pass-through portal to the insurance rates, you know, minimum limits type of stuff, you know, they they may struggle and find some challenges upcoming in the not so distant future. But you know, there's always been the direct outlet, right? Progressive Geico, you know, those direct to consumer, you never talk to anybody companies, have been around for a long, long time. Geico is a really interesting example because as of the past year, and they've got multiple year plans where you used to not be able to buy them through an independent insurance agent. They are now, they're now actively pursuing and getting set up in that segment. And in a lot of states, not California, but a lot of states, you can come into the CPA environment and we could sell you a Geico auto policy, which you know wasn't available through the independent channel for for forever, for as many years as they've been around. Right. Just a direct direct to consumer carrier. You know, so for them to invest the time, energy, and effort into like getting set up in the in the in the agent channel is a really good example of a multi-billion, billion, billion dollar company investing a lot more money into this channel. And that gives me uh, you know, a lot of it gives me a lot of uh not necessarily relief, but confidence that, you know, if Geico and their hundreds of billions or whatever, they're whatever they're worth, if they're if they're willing to invest the the money into that channel, that they still feel like it's a viable path for the foreseeable future. So there's been a lot of chatter about that. I so you know, look, I think if if someone asks me, you know, are you worried about you know robots taking your job, you know, I would say no, but I would be worried about other, you know, independent agencies and agents that use AI so that they're able to deliver, you know, a quicker response, a quicker summary, you know, and and be able to perform better. But I don't think that the human element is going anywhere with insurance.

SPEAKER_03 6:56

And I think I think at the beginning of reaching out, like now you can call a company, and before you even get to talk to a person, you're talking to an AI robot or whatever that may be. But I think that that is gonna get a lot more prevalent as we go through it. And then, you know, you have to just like you have to be like representative, representative, and they're like, Would you like to speak in Spanish? And you're like, no, I want a representative, you know, and then they're like uh press eight for speaking, you know, whatever language. I'm like, holy shit, I just want to talk to a representative zero zero zero zero zero. Right. So that I think is still gonna happen. I think that the bigger companies in the pool space are definitely messing around with this. Um, you know, my biggest problem right now is that like uh forget about AI. I just want to be able to make money on the shit that these guys are telling me that I'm supposed to be making money on. But, you know, I think when you could go to Amazon and find something, like I just bought a multi-port rebuild kit. I'm not gonna say who it was from, but uh it was like 150 bucks at uh on Amazon and $175 at my distributor. So how how does it, how is it that they're coming? They're both OEM parts, they're both coming from, you know, and sure, it like you can sit here and say all day long, oh shit, you know, you I wouldn't buy stuff off the internet, but like uh I had a situation the other day where one of my clients they had a salt cell that went bad, and like his his heater isn't really rated for salt, it's like an older JXI. So like they're not gonna want it's already out of the warranty period. And I went to go look for a replacement cell and it was like 700 bucks, and it used to be like 350. So I went on Amazon and I was like, oh man, like they have these for a couple hundred bucks for a super off brand, which fit it. And then you could get one for like 500. So like I went off on the company and I was just like, hey, like what are you guys doing? Like, how this shouldn't be, you know, that I'm able to find all of this stuff cheaper than I can actually buy it for from the distributor. Like, that's the whole point of me buying from the distributor that you guys are supposed to be, you know, competitive. So I think that you know, they're using an algorithm or whatever, you know, whatever it may be to start to determine the the pricing. Does that make sense?

SPEAKER_02 9:30

Yep, yep.

SPEAKER_03 9:31

Of like uh this is what this should be. Oh, we're not charging enough for this. Or and look, I know that parts have gone up and labors went up, and like, you know, everybody's paying more for doesn't matter if you're a chef in a kitchen or if you're a pool guy out there in the field, like you're paying a lot more for chlorine than you were five years ago. That's for that's for sure. But back, you know, switching bat lanes back to to the AI, is there anything because now AI, you could take a contract and filter it to AI and say, hey, make me a better contract or read this over and give me the the the key points or or whatever. And like, could that get you and look, um uh I watched Terminator Judgment Day when I was a kid, so like I'm I'm shit scared of AI, I don't really want to fuck with it. Um, and that's just the way that I feel. And I know that like you know, you're gonna be forced to in a few years, but like I'm I'm with Arnold Schwarzenegger, I'm against the machines, you know what I mean? Uh but like is there anything that you could that is there anything that you think is helpful in AI that could help you do your job better? And then is there something that people like need to be, you know, cautious or conscious of in that sense? Because again, like if you get a contract from a company, like what if I start writing my my contracts with AI? Like, are they are they still valid? Because like you can you can run that back and say, yeah, this was made by Chat GPT or or or whatever. So like if you find out that I'm making my contracts with AI and sending them out to people, like does that discredit it or does anything happen to that? Or like how does that all work?

SPEAKER_02 11:18

Yeah, it's a couple points to make there. Um so we find it really helpful for to summarize, you know. So let's just say I go out and I get three different quotes for a business, you know, and I've got three different PDF quotes, you know, to be able to drop them into drag and drop them into a tool that can summarize the coverages, summarizes the prices, summarizes the exclusions. That's all stuff that we would do to build a proposal to put in front of our clients, anyways. And so we find things like that are quite helpful just as far as time savers. So, you know, really I I think about, you know, like doing an inspection and being able to take, you know, being able to take and summarize, you know, or be able to take uh, you know, if it's on you know having a handwritten, you know, notepad and being able to put that into somewhere that summarizes it into a PDF and cleans it up and stuff would be is something I've seen a few a few of my clients start to do. So there's some there's some functionality that I think is good time savers. And mainly it's like the data entry detective work is really what I think about. Right.

SPEAKER_03 12:23

But what you're what you're saying is like that's behind the scenes. You would never come up front with a contract to someone that was and like look, in some of the contracts that you're getting into, um, I can see these being 50, 60, 70, 120 page contracts. Yeah. You know, so like I don't care how fast you read, like that's that shit gets boring after a while when you're on page 72 and you still got another 70 to go. You know, so that that's that's that's the thing where like uh you know, and this isn't even a question, I guess, that we could even really answer, but like how would you even know if they wrote it through through Chat GPT? You know, and how do you know if this person is a good contract writer or if they're the if they're actually good at what they do, or are they just good at using AI, right?

SPEAKER_02 13:13

Yeah, and look, whoever is saying that they wrote the contract, however, they wrote it behind the scenes, you know, like and when we think about like summarizing three policies, that you know, that's obviously something that we go through and double check and say, okay, well, this all lines up with this. It just saves you a lot of detective work, you know. But one thing I saw yesterday for the first time was a a total AI exclusion in a professional errors and emissions and ENO policy. And this isn't so it's not there yet. It's the first one that I'm aware of where it's super broad, Steve. It's like if AI touched this at any point during the it was an it was an insurance errors and emissions policy. Obviously, you know, not ours, but there was one company that started to include this exclusion. And so that's that's what you want to watch out for for the second part of that question, which is like, what should we watch out for if if it were using it? Like, just make sure your insurance doesn't have a specific exclusion for that. Terrorism, as an example, was not excluded from every policy unless you pay to add it before 9-11. Like before 9-11, the terrorism exclusion didn't exist on any insurance policies if you weren't, and but but from 9-11, that was added standards in every single one.

SPEAKER_03 14:29

What is the terrorism add-on? How much extra does terrorism insurance cost?

SPEAKER_02 14:33

It just depends. Like, I mean, if you're insuring a big building in downtown LA, you're probably talking, you know, tens of thousands, but it's a percentage of premium, you know, like for a for a thousand or a two thousand a year policy, you're probably talking like, you know, eighty bucks, a hundred bucks type of thing.

SPEAKER_03 14:49

Sure.

SPEAKER_02 14:49

Yeah, but it's got to be related to like there's no there's no feasible, like for a full service company, like you're not gonna be found liable during an act of terrorism for anything that's reasonable. You wouldn't pay it even if it was 20 bucks a year. Right, no, no, of course. For some stuff, obviously it's important to have, but that's my comment to AI is I saw the first exclusion, may not be the first first one I've seen. And so everyone's gonna need to keep an eye on their insurance policies to make sure if you have AI in the business in some way, shape, or form, that it's not ex that it's not you know limiting coverage or excluding coverage in some way.

SPEAKER_03 15:27

Okay, Pat, now you got me down a rabbit hole. I don't want to be down, first of all. Okay. So now what what happens, and this is just all theoretical, obviously. You know, I take care of a lot of apartment buildings, I take care of a lot of buildings in fucking downtown LA. What happens if, you know, I'm not on site, obviously, but there's an act of terrorism at one of the buildings that that we are working at? Obviously, none of that stuff is is ours, right? Like we don't own the pool, we don't own the the the equipment or or whatever. But is that is there anything that like the pool professional needs to to think about in this aspect? Like we don't need a rider for something like that, right?

SPEAKER_02 16:06

Like because you need to be the tr you'd need to be the trigger of whatever the damage or injuries, right? Your operations would have to cause it. And you know, technically there's things I can imagine that the government would certify your operation as yeah, no, I just I just like I just think like always like last professional on site.

SPEAKER_03 16:26

Yeah, you know what I mean? Like could there be an act of terrorism where some you know bomb goes off, whatever, and now the pool is damaged, but it also damaged a lot of the hotel rooms. They don't whether they have this coverage or don't have this coverage, I'm obviously gonna get named in that lawsuit. Yeah, yeah. You know what I mean? Not as the terrorist, not as the guy, not as the shooter. You know what I mean? Like uh, but there's just so there's just so much, so much to pack away with that.

SPEAKER_02 16:56

I think the act itself being certified as terrorism clears your service company of of anything that like you didn't cause it if it was a certified act of terrorism. So I think just by nature, the only thing that I can think of that's even remotely a possibility, which would be very, you know, like crazy just to think about, like maybe you left the gate unlocked and then an active shooter or someone came in and blew up the pool and and killed people, like which is still Yeah, it's far fet, it's far fetched, but like uh there's a lot of a lot of proof there that they would need to, you know, to put to put on that. It's just it's such a long shot, it's generally not worth the money for for a life.

SPEAKER_03 17:38

No, and like this is something where like I would never pick up a topic like this for for the show, but since we nothing's nothing's off limits here, you know. So Pat, thanks for scaring the shit out of us today.

SPEAKER_02 17:52

If you needed it, I'd put it in front of you soon.

SPEAKER_03 17:54

All right, so if you guys need insurance or you need you want to talk and learn more about insurance, California Pool Association, their door is always open for you, and they're gonna answer all your questions. And if you guys jump on for a you know, a yearly subscription with them for general liability, they're gonna say they're gonna give you a hundred dollars off. So you can you can do that. So I love California Pool Association, and I implore you guys to go look for different types of insurance, and I don't think you're gonna find any better than CPA. Because Pat, when we first met, man, I I looked around and uh you it wasn't even close. The way that you guys have taken care of us over the last 10 years, um, not only if you're a sponsor, you're you're my one of my co-hosts, and you know, you're one of my good friends too. So we really, we really appreciate the job that you do. And like I said, guys, you know, check out California Pool Association, they're really great. So thank you, Pat, for being on, and thank you, everybody, for always listening. We really appreciate you um listening in. And if you guys ever have any topics, and hit us up at talkingpools at gmail.com and we'll uh we'll do it in our next insurance interlude. See you guys next. See you guys.