Lloyd, London-backed Tested, part of Lloyd's Lab Innovation Accelerator, has launched a new data and technology platform aimed at undertaking insurance contracts for risks related to artificial intelligence.
Testudo is a company incubated through several legal and corporate accelerators and supported by investors such as LocalGlobe and Goldman Sachs Partners, seeking to provide businesses with a way to better manage their legal and financial exposures associated with AI deployments.
The platform compiles and analyzes real-time data on AI-related litigation, regulatory developments, and incidents, providing an insight into the evolving legal environment regarding the use of corporate AI.
By processing this information, Testudo aims to help insurers and businesses identify and quantify risks that may not be noticed by traditional underwriting methods.
As part of London's Innovation Lab Lloyd, included in Cohort 14, Testudo plans to introduce new insurance products aimed at enterprise clients by the second half of 2025.
According to Testudo data, the increase in adoption of generator AI technology is consistent with an increase in related litigation. The states with the most AI litigation include California, Illinois, New York, Texas and Delaware.
In the first quarter of 2025, the generation AI lawsuit rose 23% compared to the same period in 2024, but filings from January to April 2025 skyrocketed 81% year-on-year. Settlements for AI-related cases typically average around $4 million.
While media focuses on copyright and intellectual property disputes, the most common legal claims include breach of contract, infringement of privacy and misrepresentation. AI applications such as customer service, marketing content generation, and recommended algorithms are important sources of litigation.
The data also shows that the number of insurers are increasingly challenging AI-related claims in court due to policies that are not initially designed to cover these emerging risks.
The forecast from Deloitte suggests that by 2032 the global market for AI-related premiums could reach $4.7 billion a year.
Testudo's underwriting methods are notable because they do not require deep integration with the company's AI systems or models, which can be adopted by clients and facilitate scaling.
Their platform supports risk scoring and reporting tools that help risk managers, insurance companies and brokers in the detection and assessment of potential debt.
Testudo was developed with support from several accelerators, including law firm A&O Shearman's Fuse, Jones Day's Finaccelerate, and Enterprise Venture Accelerator Plag and Play. In 2024, we collected pre-seed funding rounds from investors such as LocalGlobe, A100X, Charlie Songhurst and Goldman Sachs Partners.
The company's CEO, George Lewin Smith, has a background in promoting the adoption of emerging technologies within Goldman Sachs' London and San Francisco offices. The founding team also has experience in implementing AI systems and creating new trading products at Goldman Sachs. Testudo's Insurance Director Mark Titmarsh brings over a decade of expertise to underwriting and broking new and developing risk products.
While Testudo's platform introduces new approaches to managing the risks of AI insurance, the challenge remains whether it can effectively navigate the rapidly shifting legal and technological environment surrounding artificial intelligence.
“We are proud to support Lloyd's lab startup testodo, saying it will provide new data and a unique underwriting approach to Lloyd's marketplace for AI liability insurance, as well as opportunities to address rapidly evolving risks, generate new premiums and gain measurable operational efficiencies, and measurable operational efficiencies across the market.
“By fostering innovation from concept to scale, we are not just developing products. We are building the industry's future resilience and solidifying Lloyd's position as the world's leading insurance market.”
Lewin-Smith said: “Our technology and data allow us to accelerate company recruitment with understanding, price, underwriting and insurance coverage of real-world artificial intelligence risks.”
Titmarsh added: “Testudo bridges the underwriting expertise of highly skilled London experts from the Bay Area to ensure an AI economy.”
