The Continued Rise of Generative AI Exclusions in Commercial Insurance Policies: What Policyholders Need to Know

Chair of Olshan’s Insurance Coverage Law Practice Anthony Crawford authored an article in The Legal Intelligencer entitled “The Continued Rise of Generative AI Exclusions in Commercial Insurance Policies: What Policyholders Need to Know.” In the article, Anthony explains how insurers are rapidly introducing generative AI exclusions and what commercial policyholders can do now to mitigate risk and protect coverage. “As the use of artificial intelligence becomes more woven into the fabric of everyday personal and commercial endeavors, the risks associated with that use have begun to surface," he writes. "As with any risk, commercial policyholders will often look to insurance as a risk mitigation tool.” Anthony cautions that AI exclusion language is spreading beyond CGL to D&O, E&O and fiduciary liability policies, sometimes with extraordinarily broad definitions of artificial intelligence. He recommends implementing sound AI use policies, reviewing contracts with vendors and customers for indemnity gaps, and negotiating narrower exclusions or carve backs where possible. “Policyholders should not assume that they do not have coverage under their existing policies for AI-related liabilities. Indeed, the introduction of new AI exclusions is a strong indicator that the insurance industry recognizes that insurance policies currently provide that coverage.” Anthony explains.