How Policyholders Can Press For Narrower AI Exclusions

Chair of Olshan’s Insurance Coverage Law Practice Anthony Crawford authored an article in Law360 entitled “How Policyholders Can Press for Narrower AI Exclusions.” In the article, Anthony explains how businesses can identify and address AI-related insurance coverage gaps before renewal, including by negotiating narrower exclusions and documenting responsible AI governance. “Policyholders should begin collaborating with their brokers well ahead of the renewal of their insurance policies to identify any proposed introduction of AI related exclusions. If faced with AI exclusions, they should work with brokers to negotiate as narrow exclusionary language as possible,” Anthony writes. As insurers introduce generative AI exclusions across commercial general liability, directors and officers, errors and omissions, fiduciary liability and other policies, organizations should audit their insurance programs and map material AI use cases to responsive coverage, exclusions, retentions, sublimits and notice obligations. Companies should also strengthen vendor due diligence and contractual protections by confirming whether AI vendors’ insurance covers AI enabled services, contractual indemnities, intellectual property claims and defense costs. “The immediate objective is to make AI risk legible to insurance companies and defensible if a claim occurs, before renewal leverage is lost,” Anthony writes. “The introduction of new AI exclusions is itself a strong indicator that the insurance industry recognizes that current policies provide such coverage absent the new endorsements.”