Berkshire Hathaway, Chubb Win Approval to Drop AI Insurance Coverage
The Takeaway
- State regulators approve insurers’ requests to exclude AI damages.
- Over 80% of insurer requests for AI exclusions were approved by states.
- Specialized firms now offer new AI liability insurance policies.
Major insurers including Berkshire Hathaway, Chubb and Travelers are taking steps to cut AI-related damages from corporate insurance policies, and U.S. state regulators are giving them the green light.
Insurers are trying to get ahead of risks from companies that use generative artificial intelligence to automate tasks, stoked by the fast pace of model improvements. Executives at major insurance brokers, including Aon, Gallagher and Lockton, say that if insurers make the proposed AI exclusions from general liability policies official, they could exclude claims caused by AI agents that, for example, improperly use copyrighted material to create ads for marketing teams.
Other risks typically covered by general liability policies include property damage and personal injuries.
If insurers explicitly carve out AI from such insurance policies, companies that use AI could choose to bear the risks of agents going awry or try to get AI providers to take on more of the risk. Insurers could also end up creating new types of policies specifically for AI.
Insurance commissioners across the country have approved more than 80% of requests from subsidiaries of large insurers to exclude AI damages from corporate policies, according to thousands of regulatory filings compiled and analyzed by investment firm Wolfe Research. Most insurers are regulated by states. So far, Florida, Connecticut and Maryland have approved the highest number of requests from insurers for such exclusions, the data compiled by Wolfe show.
Berkshire and Travelers began requesting for AI exclusions last fall and some states approved them to take effect as soon as the start of the year, the data show. Travelers and other insurers, such as AIG, said their subsidiaries requested the approvals based on AI-exclusion templates introduced last year by the Insurance Services Office, a private body that sets standards for the industry, and which was approved by the state regulators. But the companies said they have not implemented the exclusions. (A spokesperson for Berkshire’s insurance arm declined to comment, and spokespeople for Chubb did not respond to requests for comment.)
‘Unsustainable Risks’
AI exclusions from insurance policies could pose a problem for top AI developers and cloud providers that sell AI models to businesses. Those businesses could slow the release of AI-powered products or features until they sort out coverage for potential liabilities if the AI makes mistakes, said Connor Deeks, CEO of Codestrap, a boutique consultancy that advises several Fortune 500 companies on how to use AI.
“Companies are being pushed to use AI at unsustainable rates,” Deeks said. “The risks will become unsustainable and translate to financial losses.”
Most insurers haven’t yet taken steps to exclude AI from policies in California, New York, and Texas, where some of the most prominent AI providers are headquartered. That’s because the states haven’t yet approved ISO’s templates for AI exclusions, which insurers use. That means companies in those states could still rely on traditional policies for AI coverage.
The proposed exclusions would impact existing liability policies that theoretically cover a number of AI-related claims, such as employees who accuse businesses of using AI to discriminate against them or businesses that sell robots that damage property.
Insurers are monitoring recent consumer lawsuits against businesses using AI products and whether they will be forced to pay claims not intended to be covered under existing policies. Consumers filed about 800 such lawsuits in 2025, up 140% from the prior year, Wolfe Research said in a recent report.
“Insurers across many lines of coverage are really grappling with whether to draw a hard line on coverage for AI-driven losses or to leave it blurred,” said John Farley, a managing director of corporate insurance broker Gallagher.
General liability policies would only apply to some AI-related losses, experts said. Even if insurers cut out AI coverage from those policies, the companies they insure could ask them to cover AI losses under other policies, such as cybersecurity policies and errors and omissions policies that cover businesses making negligent mistakes like putting the wrong numbers in a customer contract.
But insurers’ proposed AI exclusions show they are likely to try to exclude AI from the other policies, according to Kevin Kalinich, Aon’s head of intangible assets, and Preet Gill, Lockton’s executive vice president of global technology risk. For instance, the Financial Times reported Wednesday that some insurers are moving to cap AI-related losses in cybersecurity policies.
To be sure, the largest companies could end up negotiating for AI coverage directly with their insurers, as they typically develop customized policies.
Insurers moving to cut AI coverage are probably trying to avoid a repeat of the 2010s, when a wave of cybersecurity attacks triggered corporate claims. Businesses in some cases successfully argued that traditional insurance policies covered losses from such attacks because they didn’t explicitly exclude them, brokerage executives said.
Insurers have mostly responded by excluding cybersecurity coverage from traditional policies and creating standalone cyber insurance—an approach they may repeat with generative AI.
Startups Pounce
Some firms such as Munich Re, the world’s largest reinsurer, and newer insurance startups have started selling policies to cover AI damages specifically.
Artificial Intelligence Underwriting Company, based in San Francisco, says it offers insurance policies to startups developing AI, such as voice AI maker ElevenLabs, covering losses of up to $50 million. Canadian upstart Armilla, meanwhile, says it has dozens of clients and covers up to $25 million in AI-related losses for AI developers and companies using AI. Insurance marketplace Lloyd’s of London is the primary risk-bearer of Armilla’s policies.
Other insurance startups such as Corgi, Mayflower Specialty and Embroker have also introduced standalone AI liability policies.
Corgi’s insurance policies are aimed at tech startups developing or using AI, covering losses related to AI mistakes as well as AI-related intellectual property infringements, property damage, or software service interruptions. Those policies typically cover up to $2 million in losses and cost anywhere from a few hundred dollars to several hundred thousand dollars a year.
“A lot of traditional carriers, they don’t know how to underwrite AI and they’re very spooked by AI,” said Emily Yuan, Corgi’s chief operating officer.
Traditional insurers such as Tokio Marine Holdings, W.R. Berkley, and Fairfax Financial began applying for AI exclusions in 2023 and 2024, when enterprise use of AI was still early. Then in the second half of 2025, the Insurance Services Office endorsed such moves and insurers have “meaningfully accelerated” efforts to get approvals for AI cutouts since then, said Wolfe Research analyst Tracy Benguigui in a recent report.
Tokio, Berkley and Fairfax Financial did not respond to requests for comment.