Major insurers have recently sought permission from US regulators to offer policies excluding liabilities tied to businesses deploying AI chatbots and agents
AIG, Great American and WR Berkley seek permission to limit liability from AI agents and chatbots
Context & Ripple Effects
Insurance coverage for AI has been splitting between targeted protection and tighter underwriting: Lloyd’s insurers previously introduced cover for chatbot-error lawsuits, while reports said insurers were reluctant to take on some major AI-company risks.
The filings by AIG, Great American and WR Berkley bring that risk repricing into standard policy language, shifting attention from whether AI can be insured to which chatbot and agent liabilities will remain with the deploying business.
First-order effects
- Businesses deploying AI chatbots or agents could face policies that explicitly leave related liabilities uninsured, transferring more loss exposure to the policyholder.
- AIG, Great American and WR Berkley gain a mechanism to narrow their immediate exposure to claims connected with those deployments, subject to regulatory permission.
Second-order effects
- Companies buying coverage may need to scrutinize AI exclusions, retain more risk, or seek specialized products; the earlier chatbot-error insurance product illustrates the alternative of separately priced cover.
- Other insurers may follow with exclusions, sublimits, or AI-specific underwriting as claims uncertainty becomes harder to absorb in broad commercial policies.
Third-order effects
- If exclusions become standard, AI deployment may increasingly be governed by an insurability test: firms able to demonstrate controls and accountability could have better access to coverage than firms that cannot.
- The market could bifurcate between broad policies that exclude AI-related losses and narrower specialty products, making insurance terms an important channel for AI risk governance.
The trend: AI liability is moving from a novel underwriting question toward segmented coverage, where insurers price or exclude risk based on how AI systems are deployed and controlled.