Marsh Says Blanket AI Exclusions Backfire. Carriers Say Their Old Forms Covered Too Much.
Picture a CFO at renewal with the binder open to an endorsement she has never seen. She asks her broker whether it reaches the claims tool her operations team licensed last spring. The broker says he will find out.
That conversation is happening because carriers are adding AI exclusions to commercial policies. On October 15, on Marsh McLennan's post-earnings call, CEO John Doyle said a broad AI exclusion could create "real confusion and uncertainty." He noted very limited claim activity so far. Marsh Risk CEO Nick Studer said that where AI is an evolution of an existing risk, it will be impossible to unbundle it from the chain of causes behind a loss.
The carriers have a different explanation. Keith Savino, U.S. CEO of cyber insurer Emergence, told Insurance Business that exclusions are arriving because existing forms probably cover things the carriers never intended to cover. He also said this is not a done deal and the answer may change in three months.
I have covered the specific forms and filings in earlier issues, so I will not repeat them. The practical point is that depending on the wording, an exclusion can turn on what your vendor's product does, not on what you meant to deploy. Most vendor contracts do not say.
A new kind of capacity is arriving. Harbor, a San Francisco startup, raised $10 million in seed funding on October 13. Its pitch is to inventory a company's AI agents, score the risk, block decisions that break the company's own rules, and insure what is left. Harbor has not said how much capacity it will offer per client or which licensed carrier will issue its policies. Those are the first two questions to ask any new entrant.
Vertafore's chief product officer, James Thom, told Insurance Journal what his company tracks in its own AI tools: accuracy, human review, and an audit trail of what was done and by whom. He said agencies should ask their technology vendors the same questions. They are a fair starting list for yours.
So run the 30-Day AI Coverage and Contract Audit, starting this month. Pull every active vendor contract that touches operations, claims handling, or clinical workflow, and read the technology description in the contract, not the marketing page. Then put three questions to your broker in writing and keep the answers on file.
Has your carrier filed an AI exclusion endorsement in your states? Does your policy respond to a claim arising from an AI failure? Have you reviewed your vendor contracts for indemnification language?
If a vendor cannot answer plainly, that is an answer too. Nobody is selling certainty yet. What you can have in 30 days is a paper trail that shows you asked before the claim arrived.
Read the full research behind this story, plus this week's senior housing and governance flagships, in the LITT Briefing on Substack.