Corporate insurers are starting to back away from AI risk

"Generative AI-related lawsuits in the United States grew 978% from 2021 to 2025, according to a report from the reinsurance broker Gallagher Re. But a growing number of insurance companies are removing AI liability coverage. Berkshire Hathaway, Chubb, and Travelers have all won approval to largely drop the protection in recent months."

"Technically, the companies have added "AI exclusion clauses" to their standard commercial liability policies. Those clauses cover a wide range of issues, including employees alleging AI-driven discrimination, intellectual property violations (such as AI using copyrighted material without a company's knowledge), and property damage caused by autonomous or robotic systems."

"It's a move that could leave many companies exposed to steep financial damages. It could also slow the corporate rollout of AI, as executives weigh whether the potential risks outweigh the technology's rewards. "This is highlighting a crucial blind spot for businesses," says Ifeoma Yvonne Ajunwa, a professor at Emory University's School of Law."

"HSB , in March, began offering AI liability insurance for small businesses. "All types of businesses are using AI to do things more quickly and efficiently," said Timothy Zeilman, global head of product ownership for HSB, in a statement. "At the same time, the AI transformation brings new legal and financial exposures. Business owners may wonder, am I protected? AI insurance helps remove that uncertainty.""

Generative AI-related lawsuits in the United States rose sharply from 2021 to 2025. Several major insurers have sought approval to largely remove AI liability protection by adding AI exclusion clauses to standard commercial liability policies. These clauses can exclude claims involving employee allegations of AI-driven discrimination, intellectual property violations tied to AI using copyrighted material without authorization, and property damage caused by autonomous or robotic systems. The coverage changes may increase financial risk for companies adopting AI and may slow deployment as executives weigh potential damages against benefits. Some insurers are not removing coverage and instead offer AI liability insurance for small businesses, aiming to reduce uncertainty for business owners using AI.

Read at Fast Company