Artificial intelligence is creating a new challenge for corporate risk managers as insurers increasingly introduce AI-related exclusions into liability policies. According to Global Finance, more than 60 property and casualty carrier groups have filed to adopt some form of AI exclusion, with the impact expected to become clearer as companies approach their January 1 renewals. The exclusions are particularly affecting management and professional liability lines, including directors and officers (D&O), errors and omissions (E&O), employment practices liability (EPLI) and fiduciary liability.
The issue is that AI-related exposures are already embedded in business operations, while insurance coverage is evolving more slowly. Potential claims include AI-driven discrimination, intellectual-property violations and property damage caused by autonomous or robotic systems. The article also highlights the growing concern around “shadow AI”, where employees use unauthorised AI tools without the knowledge or oversight of IT and security teams. Some exclusions may not be explicitly labelled as AI exclusions and can instead appear within existing cyber exclusions or renewal endorsements, creating a significant information gap for executives and boards.
The insurance market’s response is beginning to resemble the development of cyber insurance. AI risks were initially capable of falling within existing “silent” coverages, but insurers are now seeking to define, exclude and separately price the exposure. The article notes that standalone AI liability coverage is already emerging, with some available limits reaching $2 million to $50 million, while Munich Re has introduced its aiSure solution. For risk managers, the immediate priority is therefore to identify AI exposure before renewal, review exclusions carefully and strengthen AI governance. As one industry estimate suggests, AI liability could become a core insurance product category by 2029, underscoring how quickly this risk is developing.
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