Audit Rights
Contractual rights that let an insurer examine a vendor's AI systems, data practices, and compliance controls. Required for high-risk third-party AI.
Audit rights are the contractual permissions that allow an insurer to examine a vendor’s AI systems, data practices, and controls. They are a critical clause for high-risk AI vendors, because the carrier remains responsible for regulatory outcomes even when the model is built and operated by a third party.
Audit rights can take different forms. Some contracts allow the insurer to conduct its own audit. Others require the vendor to provide audit reports from a qualified third party. At minimum, the contract should guarantee cooperation with regulatory examinations and access to model documentation and testing results.
A vendor that refuses audit rights is a data point for risk assessment. It may signal that the vendor has not operated in a regulated insurance environment or is unwilling to expose its model to scrutiny. See our AI vendor risk assessment checklist and glossary entry on vendor oversight.