On May 21, 2024, the Council of the European Union formally endorsed the latest draft of the EU’s Artificial Intelligence Act (AI Act). This milestone sets the stage for the Act to become law, pending final signatures and publication in the EU Official Journal, expected within two to four weeks. The AI Act’s phased implementation will begin by the end of this year, introducing extensive new requirements for companies involved in AI systems and general-purpose AI (GPAI) models in the EU, with non-compliance potentially resulting in fines up to EUR 35 million or seven percent of the total worldwide annual turnover, whichever is higher.
**Key Implementation Phases of the AI Act:**
– End of 2024: Certain AI applications, such as those exploiting individual vulnerabilities or utilizing untargeted facial recognition data, will be banned.
– Q2 2025: Requirements for general-purpose AI models will take effect.
– Q2 2026: Most regulations for high-risk AI systems and AI systems with specific transparency risks will become enforceable.
– Q2 2027: Limited rules for existing high-risk AI systems will be implemented.
– Q2 2030: High-risk AI systems used by public authorities must comply, irrespective of design changes.
As AI-focused tech companies navigate these regulatory changes, securing robust Directors and Officers (D&O) insurance and cyber liability insurance is essential. The Executive Liability Team at Churchwell Insurance Agency is highly skilled in ensuring your company has the right coverage to meet these new regulatory demands and protect against potential risks. Call us today for a comprehensive policy review to ensure your leadership and organization are properly protected. 844.604.1357
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