Major US mortgage lenders are taking out insurance policies to cover potential losses from artificial intelligence screening errors. As these institutions increasingly automate loan application reviews using AI systems, they're grappling with a new liability: algorithmic mistakes that could cost them millions.

The move reflects growing pains in financial technology adoption. Lenders face a paradox—AI screening speeds up decisions and reduces operational costs, yet introduces novel risks that traditional underwriting never posed. Wrong denials, discriminatory outcomes, or missed fraud signals can trigger regulatory fines and reputational damage.

This hedging strategy signals something broader: even as traditional finance embraces automation, players recognize that technology isn't risk-free. Insurance becomes a buffer while the industry figures out proper guardrails. Whether it's mortgage lending or other sectors, the lesson is clear—technological efficiency demands accountability.