Wiregrass AI

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Your business insurance may not cover AI mistakes. Here’s how to check

Dozens of insurers have filed to exclude AI claims, and a top broker warns of “real confusion and uncertainty.” What to ask your agent before renewal.

By Wiregrass AI3 min read

Say an AI tool your business uses gets something wrong. It builds an ad around a photo you didn’t have the rights to, or your website’s chat assistant promises a customer a refund you don’t offer. You’d probably expect your liability insurance to step in. That’s less certain than it used to be.

This week, one of the biggest names in insurance pushed back on a trend most owners haven’t heard of. On Thursday, John Doyle, CEO of the insurance broker Marsh, warned that a broad AI exclusion in insurance policies could create “real confusion and uncertainty,” Reuters reported.

What’s changing

  • Ready-made exclusions. Since January 1, insurers have been able to attach a standard generative AI exclusion to commercial general liability policies, which cover claims that your business hurt someone, damaged their property, or harmed them through your advertising. The wording comes from ISO, whose standard forms many insurers use, and each insurer decides whether to use it.
  • Lots of filings. A September analysis by the Center for Strategic and International Studies (CSIS) reported that more than 60 property and casualty insurers filed for AI exclusions in 2026, including Berkshire Hathaway, Chubb, Travelers, and AIG. W. R. Berkley proposed wording that would bar claims involving “any actual or alleged use” of AI.
  • Uneven use, so far. Business Insurance reported on October 7 that broad AI exclusions are struggling to gain traction. Zurich’s Alex Wells said ISO’s exclusions are “generally only being adopted by smaller carriers who automatically adopt things that ISO does.” That matters if your policy comes from a smaller insurer.
  • New coverage for the gap. In March, HSB, part of Munich Re, introduced AI liability coverage for small and midsize businesses, aimed at claims that “some General Liability policies exclude.” It’s added to policies from insurers that partner with HSB, once regulators approve it.

So whether an AI-related claim is covered depends on your insurer and your policy’s exact wording. Many owners won’t find out until a claim is denied.

Why it matters for a small business

AI is already everyday work for small businesses. In HSB’s survey of 1,000 small and midsize businesses, 74% said they use AI programs, most often for marketing.

And a business answers for what its AI tells customers. In 2024, a Canadian tribunal ordered Air Canada to pay a customer C$812 after its website chatbot wrongly said a bereavement discount could be claimed after buying a ticket. Air Canada argued, in effect, that the chatbot was responsible for its own actions. The tribunal called that “a remarkable submission,” adding: “It makes no difference whether the information comes from a static page or a chatbot.”

The amount was small, but the principle isn’t. And AI agents that act on their own raise the stakes: OpenAI and Anthropic have both disclosed agents that broke rules to finish tasks.

Five things to do before your next renewal

  1. Ask your agent directly. “Do any of our policies exclude claims involving AI?” Ask about general liability, professional liability, and cyber coverage, and ask to see the exact wording, in writing.
  2. Tell your agent how you use AI. List the tools and what they touch: ads and social posts, a website chat assistant, quotes, customer emails. An accurate picture helps your agent spot gaps before a claim does.
  3. Keep a person between AI and your customers. Have someone check anything AI writes that goes out under your name, like ads, quotes, and answers about prices or refunds. It’s the simplest protection you have, insured or not.
  4. Read your AI tools’ terms. Find out who’s responsible when a tool’s output leads to a claim, and what protection, if any, the vendor offers on your plan.
  5. Ask about AI coverage if you find a gap. Add-ons like HSB’s exist for exactly this. Your agent can tell you what your insurers offer and what it costs.

Where we can help

We’re not insurance agents, and your agent has the final word on your coverage. But steps 2 and 3 are where we come in. Our AI strategy and training work includes a plain-language AI policy: which tools are approved, what they’re used for, and how their output gets checked. That’s the same picture your agent needs to find gaps. For the basics, see our post on shadow AI.

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