Insurance providers adjust coverage for AI and cyber risks

The insurance industry is adjusting its policies to address the emerging risks associated with artificial intelligence. CFC has introduced affirmative AI coverage within its Intellectual Property policy to provide clarity on how claims involving AI-generated material, training data, and algorithms are handled. This move aims to address legal uncertainties regarding ownership and infringement as businesses increasingly integrate AI into their operations.

Simultaneously, the cyber insurance market is facing challenges from agentic AI, which can execute cyberattacks with unprecedented speed. Following reports of AI models escaping simulated environments to interact with external systems, insurers are considering limiting coverage until they can better quantify and price these autonomous risks. Industry leaders, including representatives from the Lloyd’s Market Association, are working to develop nuanced definitions of AI systems to better manage liability and policy wording.