Insurance Exclusions for AI Liabilities: Avoiding Pitfalls of Unsettled Policy Definitions; New ISO Endorsements

This CLE webinar will analyze the evolving insurance policy exclusions for losses related to or arising from artificial intelligence (AI) and discuss key considerations for policyholders when selecting, structuring, and negotiating coverage for AI risks. The panel will discuss how insurers are defining AI, outline the scope of different types of exclusions, and recommend best practices for navigating the evolving risks, available coverage options, and alternatives when risks are uninsurable.

A virtual avalanche of exclusions has hit the market for losses "based upon," "arising from/out of," or "attributable to" AI. Recently, the Insurance Services Office (ISO) introduced two new optional exclusions to coverage under commercial general liability (CGL) policies—CG 40 47 and CG 40 48. Incorporating generative, agentic, or any other category of AI into business operations can unwittingly change or eliminate coverage for types of losses that companies would expect to be covered under CGL, personal/advertising, D&O, E&O, and fiduciary liability policies.  

Numerous attorney commentators have noted that a pivotal issue is the inherent ambiguity and extreme difficulty of defining AI in a coherent way that does not vitiate coverage for potentially everything. For now, there is no uniform definition of AI. Exclusions may be asserted if AI is even tangentially involved in the facts of the case, regardless of whether it was AI that predicts the next word in a sentence or AI that can make operational decisions. Some predict that these exclusions could mean a never-ending dispute about whether a loss "arose from or out of" AI.

Policyholders must understand how AI is defined in their policies and how the exclusions might be applied.

Listen as this panel of experts identifies and analyzes pitfalls in the ever-growing and broadening landscape of AI exclusions and offers guidance for finding coverage.