The insurance industry widely sets exclusions for generative AI risks
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CSA Labs Research points out that generative AI risks fall under "Knightian uncertainty" due to the lack of historical loss distributions, so insurers cannot offer actuarially based rates and can only respond with exclusions rather than coverage. The generative AI exclusion endorsements CG 40 47, CG 40 48, and CG 35 08 introduced by ISO in January 2026 have been filed or adopted by more than 60 U.S. property insurance groups; W.R. Berkley has proposed excluding "any actual or alleged AI use" in directors and officers, professional liability, and fiduciary liability insurance. AI-related litigation increased between 2021 and 2025.
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- CSA Labs ResearchThe AI insurability gap: why insurers cannot price invisible risks
Generative AI risks fall under "Knightian uncertainty" due to the lack of historical loss distributions, so insurers cannot offer any actuarially based rates and can only respond with exclusions rather than coverage. The generative AI exclusion endorsements CG 40 47, CG 40 48, and CG 35 08 introduced by ISO in January 2026 have been filed or adopted by more than 60 U.S. property insurance groups, and W.R. Berkley has proposed excluding "any actual or alleged AI use" in directors and officers, professional liability, and fiduciary liability insurance. AI-related litigation grew 978% between 2021 and 2025, while 45% of employees use AI on company devices, two-thirds of them through personal accounts invisible to IT, making it difficult for underwriters to determine what AI the insured is actually running.