Advertising Law Blog

As AI continues to be used more and more by individuals and organizations, we anticipate an uptick in insurance claims related to AI and its use and implementation. To date, while there are some policies geared towards creators of AI, the insurance industry has not introduced widespread standard form policies addressing AI liabilities. Policyholders facing AI related claims can and should look to traditional coverages to address insurance claims related to AI and AI use. These coverages include:

• E&O/Professional Liability policies which can address claims involving errors or losses stemming from a company’s implementation of AI in its business practices. Remember, AI is still just a tool, and the wielder of that tool still bears responsibility for liability arising from its use.
• Cyber Liability Policies which may be called on to respond to claims involving malicious use of AI.
• Products/General Liability policies which may be called on to respond to claims of bodily injury or property damage arising from the use of AI in certain products such as autonomous vehicles or automated manufacturing processes.
• Employment Practices Liability coverage which can be called on for employment-related claims arising from AI use. There have already been successful lawsuits involving discriminatory conduct because of age and racial biases perpetuated by AI use in hiring and insurance claim processing.
• Media Liability/IP coverage, which will likely continue to come into play. There are a significant number of infringement related lawsuits pending arising from the use of copyrighted material used to train AI models.
• D&O coverage can respond to claims involving a company’s decisions around AI use and implementation

As with any new technology, the insurance industry can be slow to respond, and policyholders usually can find coverage in existing policy types. With AI, however, expect the insurance industry to move forward quickly to develop controls to mitigate AI related risks. This can be in the form of AI specific exclusions in existing policy types. And of course, with the exclusions, policyholders can expect the insurance industry to develop AI specific coverages.

2026 will likely see government regulatory efforts that may impact the AI insurance landscape. There is currently a tension between the federal government and state government regarding legislative regulation of AI. The federal government has raised concerns about the geo-political ramification of the “AI arms race” occurring between the US and other world players such as China. The federal government has tried to prevent states from implementing any regulations on AI. States, in turn, have raised concerns about protecting their citizens through regulating aspects of AI, such as requiring insurance companies to disclose their use of AI in underwriting and claims handling policies and procedures.