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by Jennifer Gibbs

As AI use increases in current business operations, insurers are racing to define their risk appetite for this rapidly evolving exposure. Over the past year, several carriers have introduced exclusions and endorsements addressing AI-related risks in professional liability policies.

Berkley recently introduced one of the broadest examples to date. Its “absolute” AI exclusion (intended for D&O, E&O, and Fiduciary Liability policies) eliminates coverage for any claim “based upon, arising out of, or attributable to” the actual or alleged use, deployment, or development of artificial intelligence. The endorsement goes on to enumerate specific applications such as AI-generated content, failure to detect AI-produced materials, inadequate AI governance, chatbot communications, and even regulatory actions related to AI oversight.

Hamilton Insurance Group has taken a similarly cautious approach. Its Generative Artificial Intelligence Exclusion for professional liability policies removes coverage for any claim, wrongful act, damages, or defense costs based upon, arising out of, or in any way involving any actual or alleged use of “generative artificial intelligence” by the insured.  The endorsement defines “generative artificial intelligence” as “any system that produces content such as text, imagery, audio, or synthetic data in response to user prompts, including but not limited to ChatGPT, Bard, Midjourney, or Dall-E.”

These exclusions demonstrate an emerging consensus among insurers: the uncertainty surrounding AI-driven technologies, particularly in areas of authorship, data integrity, and misrepresentation, pose risks that traditional policy language was not designed to address. For now, most carriers are choosing to exclude these exposures outright while the industry evaluates how to measure and price AI-related risk.

In time, the market may evolve toward affirmative coverage offerings tailored for AI operations, similar to cyber-related coverage twenty years ago. Until then, brokers and insureds should not assume existing D&O or E&O coverage includes AI-related events, especially in industries that already rely heavily on AI tools. 

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The opinions expressed are those of the authors and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.