The Brokers Said No. Your Exclusion Didn't Disappear.
Picture a CFO opening a renewal and finding an AI exclusion endorsement. Last month the choice was sign it or go without. This month, there's a third option.
Marsh Risk's CEO Nick Studer wrote to insurance-market leaders that Marsh "cannot support broad or absolute AI, or generative AI, exclusions that create protection gaps for our clients." Where carriers insist, Marsh will recommend clients "seek alternative terms and consider alternative markets" (The Insurer, Oct. 5).
Three days later, Aon and WTW said the same thing. Aon's Tracy-Lee Kus: "we feel really strongly about no blanket AI exclusions." WTW's Andrew Hill called exclusions in cyber "a commercial disaster" (The Insurer, Oct. 8).
Carriers are split too. At the Council of Insurance Agents & Brokers' Insurance Leadership Forum, Zurich North America CEO Alex Wells said ISO's AI exclusions are "generally only being adopted by smaller carriers." Zurich prefers "to think about AI as an underwriting question rather than a contract question" (Business Insurance).
It's not resolution. It's leverage. An exclusion already attached to your policy stays there until someone negotiates it off. And WTW's Hill added a warning: clients should not expect all AI risk to be insurable.
An underwriting approach cuts both ways. If AI is an underwriting question, your governance answers become part of the price.
Before your next renewal, run the 30-Day AI Coverage and Contract Audit. Ask whether your carrier has filed an AI exclusion endorsement in your states. Ask whether your policy responds to a claim from an AI failure. Ask whether anyone has reviewed your vendor contracts for indemnification language. Then ask what alternative terms were tested.
Disclosure: Gallagher is my employer.
Read the full research behind this story, plus this week's senior housing and governance flagships, in the LITT Briefing on Substack.