--- title: AI and Is It Covered? description: Generative AI is transforming how businesses operate, but it is also creating a new category of risk that traditional insurance products may not address. image: https://blog.ryanspecialty.com/hubfs/Screenshot%202026-09-29%20145405.png --- [Skip to content](https://blog.ryanspecialty.com/ai-and-is-it-covered#main-content) Search search cancel-thin [![Ryan Specialty](https://blog.ryanspecialty.com/hubfs/Ryan%20Specialty%20-%202022%20Logos/RyanSpecialty_RGB.svg "Ryan Specialty")](https://blog.ryanspecialty.com/) cancel-thin - [Who We Are](https://ryansg.com/who-we-are/) Show submenu for Who We Are - [Our Services](https://ryansg.com/who-we-are/#companies) - [Ryan Specialty History](https://ryansg.com/who-we-are/#history) - [Chairman's Letter](https://ryansg.com/who-we-are/#chairman) - [Leadership](https://ryansg.com/who-we-are/#leadership) - [Our Approach](https://ryansg.com/our-approach/) Show submenu for Our Approach - [Our Values](https://ryansg.com/our-approach/#approach) - [Our Difference](https://ryansg.com/our-approach/#difference) - [What We Offer](https://ryansg.com/what-we-offer/) Show submenu for What We Offer - [Wholesale Brokerage](https://ryansg.com/company/rt/) - [Binding Authority](https://ryansg.com/company/binding/) - [Underwriting Management](https://ryansg.com/underwriting-management/) - [News](https://ryansg.com/news/) Show submenu for News - [News & Press Releases](https://ryansg.com/news/) - [Ryan Specialty Blog](https://blog.ryanspecialty.com/) - [Careers](https://ryansg.com/careers/) - [Contact](https://ryansg.com/contact/) - [Investors](https://ir.ryansg.com/) RT ProExec # AI and Is It Covered? 09.29.2026 ![](https://blog.ryanspecialty.com/hs-fs/hubfs/Screenshot%202026-09-29%20145405.png?width=604&height=348&name=Screenshot%202026-09-29%20145405.png) Share [Follow us on Twitter](https://twitter.com/intent/tweet?url=https://blog.ryanspecialty.com/ai-and-is-it-covered&textAI%20and%20Is%20It%20Covered) [Follow us on Facebook](https://www.facebook.com/sharer/sharer.php?u=https://blog.ryanspecialty.com/ai-and-is-it-covered) [Follow us on LinkedIn](https://www.linkedin.com/shareArticle?mini=true&url=https://blog.ryanspecialty.com/ai-and-is-it-covered&title=AI%20and%20Is%20It%20Covered) [Mail to](mailto:?subject=AI%20and%20Is%20It%20Covered?&body=https://blog.ryanspecialty.com/ai-and-is-it-covered) [Download PDF](https://blog.ryanspecialty.com/hubfs/AI-IsItCovered_Whitepaper_Final_091726.pdf) Frank Baer Broker  RT ProExec HISTORY OF ARTIFICIAL INTELLIGENCE Although Artificial Intelligence’s (AI) adoption is a more recent phenomenon, the history actually goes back to 1914 in Spain where Spanish engineer Leonardo Torres y Quevedo developed fully automated electromagnetic chess pieces. “The machine required no human intervention once it was set up, it autonomously made legal chess moves and if the human opponent made an illegal move, the machine would signal the error.” \[1\] In the 1950s Alan Turing developed the research of AI further. Alan Turing posed the question, “can machines think?” In his paper, “Computing Machinery and Intelligence,” Turing laid out what has become known as the Turing Test, or imitation game, to determine whether a machine is capable of thinking.” Turing passed away in 1954, but two years after his passing, John McCarthy continued the early research on AI at Dartmouth College. Fifty plus years later we saw renewed interest in AI as evidenced in 2011, when IBM’s Watson was competing on the game show Jeopardy. Around that time, Apple had launched Siri on iPhones. And by 2020, OpenAI introduced GPT-3, and this is where AI started to enter the mainstream. \[2\] That brings us to today, where these technologies are increasingly being adopted by insureds with 77% of industry executives believing that quickly adopting generative AI is essential to stay competitive. \[3\] ![Screenshot 2026-09-29 145144](https://blog.ryanspecialty.com/hs-fs/hubfs/Screenshot%202026-09-29%20145144.png?width=1000&height=450&name=Screenshot%202026-09-29%20145144.png) WHAT IS GENERATIVE AI? Artificial intelligence is not new, but generative AI is a specific category that has exploded in the last few years. Generative AI refers to AI systems that can create new content—text, images, video, audio, or code-based on the data it was trained on. Examples include ChatGPT, Claude, Microsoft Co-Pilot, or any of the hundreds of AI-powered chatbots and content generators now used across virtually every industry. What makes generative AI different from traditional software is that its outputs are not pre-programmed. The AI generates responses on the fly, which means the outputs are unpredictable and can sometimes be wrong, misleading, or harmful. This unpredictability is at the heart of this brand-new category of business risk. \[4\] WHAT IS THE DIFFERENCE BETWEEN GENERATIVE AI AND AGENTIC AI? AND A NOTE ON AI AGENTS Agentic AI is a sophisticated type of AI focused on autonomous decision-making. Unlike traditional AI, which mainly reacts to commands or analyses data, agentic AI can set goals and complete tasks with minimal human oversight. This emerging technology promises to transform industries by automating complex processes and enhancing workflows. \[5\] While agentic AI and generative AI are both branches of artificial intelligence that can be integrated, they serve different purposes. Generative AI specializes in creating new content such as text, images, code, and music based on input prompts, with large language models (LLMs) driving its capabilities. It enables users to generate or edit content and perform basic functions. In contrast, agentic AI leverages LLMs as “brains” to orchestrate agents that execute actions in underlying systems, aiming for higher-level objectives. For instance, generative AI might create marketing materials, while agentic AI could deploy these materials, monitor their performance, and automatically adjust the marketing strategy based on results. Thus, agentic AI utilizes generative AI as a tool to fulfill its goals. \[6\] While “agentic AI” and “AI agents” are often used together, they have a subtle distinction. AI agents are the fundamental components of agentic AI. Think of AI agents as individual tools, while agentic AI involves the coordinated use of those tools to achieve more complex objectives. In terms of deployment in the insurance industry, it seems most companies are focused on utilizing Generative AI vs Agentic AI at the moment. But as we all get more comfortable with Agentic AI, that could change quickly. GENERATIVE AI APPLICATIONS IN INSURANCE We are seeing our insureds using this technology, and similar trends are emerging throughout the insurance industry. Insurers and brokers are evaluating how these tools may support efficiency, innovation, and customer service objectives. Examples of potential applications in the insurance industry include: \[4\] - Marketing and Distribution: Content generation, customer sentiment analysis, personalized offers, and support for agents or brokers. - Underwriting: Data synthesis, coverage review assistance, conversational guidance, and document summarization. - Claims Management: Assistance with claims intake, file summarization, fraud investigation support, and automated communications. - Customer Service: Digital assistants offering 24/7 multilingual support and policy information access. - Product Development: Identifying products and trends, drafting descriptions, and conducting internal knowledge searches. - Operations and Support Functions: Knowledge management, reporting, compliance documentation, procurement support, and IT productivity tools. \[3\] NEW EXPOSURES FROM AI Companies that deploy a generative AI tool—whether it’s a customer facing chatbot, an internal content generator, or an AI-powered sales assistant—may be exposed to a new set of third-party liability risks. If the AI produces an output that causes harm to someone outside the company, the company deploying it could be held liable. Potential areas of exposure include: - AI Errors: AI can give inaccurate advice or makes a misstatement that causes a third party to suffer a financial loss. - IP Infringement & Defamation: AI generates content that could infringe on someone’s intellectual property or produces defamatory statements. \[3\] - Unauthorized Data Disclosure: AI can inadvertently reveal protected personal information through its outputs. - Bodily Injury: A third party suffers physical harm because they relied on an AI- generated output. - Property Damage: Reliance on AI output can lead to damage to someone else’s property. According to recent research last year, 88% of organizations now use AI in at least one business function, \[7\] which is up 10% vs 2024. This means many of your clients may already have some degree of generative AI exposure. ![Screenshot 2026-09-29 145235](https://blog.ryanspecialty.com/hs-fs/hubfs/Screenshot%202026-09-29%20145235.png?width=1000&height=487&name=Screenshot%202026-09-29%20145235.png) HOW THE INSURANCE INDUSTRY MARKET IS RESPONDING Generative AI adoption has evolved rapidly, and the insurance market continues to evaluate how to address the associated risk. As organizations incorporate these technologies into their operations, questions may arise regarding how existing insurance policies respond to AI-related exposures. We are seeing some carriers exclude AI on their quotes, and other carriers are deciding to stay silent on it. This may create questions regarding coverage that will ultimately depend on the facts of a claim and the applicable policy wording. Most traditional insurance products were designed before the widespread adoption of generative AI. They were focused on more established familiar risks like slip-and-fall injuries, product defects, or professional negligence. This can raise questions regarding how certain AI-related claims may be addressed under existing insurance programs. MARKET DYNAMICS The numbers tell a compelling story. There have been 700+ generative AI- related lawsuits filed in the U.S. between 2020 and 2026, and the curve is accelerating sharply. \[8\] March 2026 saw the greatest number of GenAI lawsuits in the US ever, with and the trend increasing. \[9\] Deloitte projects the AI insurance market will reach $4.8 billion in gross written premium by 2032. \[8\] The combination of rising litigation, expanding regulation, and accelerating adoption likely to increase interest in dedicated AI liability coverage. \[8\] Existing insurance products were largely developed before the widespread adoption of generative AI and were not specifically designed to address AI-related risks. As a result, questions may arise regarding how AI-related claims are addressed under traditional coverages such as GL, D&O, E&O, and cyber insurance. While some may view cyber insurance as a natural fit for these exposures, carrier approaches have varied, with some insurers specifically addressing AI-related risks through exclusions or limitations and others extending coverage in certain circumstances. As organizations continue to adopt AI technologies, the insurance market is evaluating how to respond, and some insurers have introduced standalone AI liability products designed to address these evolving risks. HOW THE INSURANCE INDUSTRY MARKET IS RESPONDING Generative AI adoption has evolved rapidly, and the insurance market continues to evaluate how to address the associated risk. As organizations incorporate these technologies into their operations, questions may arise regarding how existing insurance policies respond to AI-related exposures. We are seeing some carriers exclude AI on their quotes, and other carriers are deciding to stay silent on it. This may create questions regarding coverage that will ultimately depend on the facts of a claim and the applicable policy wording. Most traditional insurance products were designed before the widespread adoption of generative AI. They were focused on more established familiar risks like slip-and-fall injuries, product defects, or professional negligence. This can raise questions regarding how certain AI-related claims may be addressed under existing insurance programs. ISO CGL FORMS EXCLUSIONS In January 2026, Verisk/ISO introduced new endorsements that allow carriers to explicitly exclude generative AI exposures from Commercial General Liability (CGL) policies. These are the forms that underpin roughly 82% of U.S. property and casualty policies, so the impact is widespread. \[8\] The two key endorsements are: - CG 40 47: Excludes coverage under both Coverage A (Bodily Injury & Property Damage) and Coverage B (Personal & Advertising Injury) for anything arising out of generative AI. - CG 40 48: Excludes Coverage B only (Personal & Advertising Injury) for generative AI exposures. Interest from carriers in adopting these exclusions has been strong, and rapid adoption is expected. This means that many of your clients may soon find—or may already find—that their general liability explicitly excludes AI-related claims. ![Screenshot 2026-09-29 145327](https://blog.ryanspecialty.com/hs-fs/hubfs/Screenshot%202026-09-29%20145327.png?width=1000&height=239&name=Screenshot%202026-09-29%20145327.png) EMERGING AI RISKS Many have heard about AI hallucinations and potentially incorrect advice. But as Agentic AI becomes more mainstream, the risk profile of AI might increase. Often with technology, it takes a while for expectations to meet reality, but the AI industry is stepping up and releasing new updated models at an increasing pace – the speed of change and adoption of AI is accelerating quickly. There are a number of exposures we are attempting to wrap our heads around, but once systems start talking and engaging with Agentic AI, any mistake could be amplified. The cost for bad actors at the same time has gone down significantly; a cyber-attack kit can cost as little as $50 now. \[10\] And the hackers are becoming harder to detect with the help of AI for spell checking. With this in mind and considering the continued evolution of AI, it is important that organizations carefully assess and address these risks. AI insurance can provide an additional layer of protection as part of a broader risk management approach. CURRENT POLICIES WERE NOT DESIGNED FOR THIS Beyond the new ISO exclusions, existing insurance products were generally developed before the widespread adoption of generative AI and were not specifically designed with AI-related risks in mind. CGL policies traditionally focused on bodily injury and property damage triggers. E&O policies have typically been associated with professional mistakes made by humans. Cyber policies have traditionally focused on data breaches and network security incidents. AI-related liability may not always align neatly with traditional insurance categories. Unlike many cyber claims, the underlying issue may not involve a data breach, network intrusion, or other security incident. Instead, a claim may arise from allegations relating to an AI-generated output and its downstream effects. As organizations continue to adopt generative AI, many are evaluating whether their existing insurance programs adequately address these evolving risks and whether specialized insurance solutions may be appropriate. REAL-WORLD CLAIMS: THIS IS ALREADY HAPPENING This is not a theoretical risk. AI-related lawsuits are being filed right now, and the pace is accelerating. \[11\] Here are some examples of the kinds of claims that could affect your clients: - Copyright Infringement at Scale: Warner Bros. and Disney have filed major lawsuits against AI companies whose tools generated content that allegedly copied their intellectual property. Companies using these same AI tools for marketing or content creation could face similar downstream claims. \[12\] - Chatbot Misrepresentation: A company’s AI customer service chatbot makes a promise or gives advice that turns out to be wrong. The customer suffers a financial loss and sues. This has already happened - and the courts have held that a company is responsible for what its chatbot says. \[13\] - Data Leakage Through AI Outputs: An AI system trained on company data inadvertently reveals confidential or protected personal information to a third party through its generated outputs. With over 700 generative AI-related lawsuits reportedly filed in the U.S. and the legal landscape continuing to evolve, many organizations are taking a closer look at their AI-related risk profiles. AI, INSURANCE, AND WHERE IT STANDS The AI industry is growing rapidly, and governance frameworks continue to develop alongside it. The consensus is that America and China are leading the AI race—America leads in private investment, and frontier AI model development, and China leads in hardware integration and industrial robotics. \[14\] Morgan Stanley reported that corporate AI investment has already reached $109 billion. The US also has another strategic advantage and that is in compute power greater than its global competitors. \[15\] It is important to stay up to date on this topic, and things are changing quickly! Generative AI is transforming how businesses operate, but it is also creating a new category of liability risk that traditional insurance products may not explicitly address. With ISO exclusions now explicitly excluding AI coverage from certain CGL forms and certain carriers adding AI exclusions to E&O and D&O policies, questions may arise regarding how certain AI-related claims will be addressed under existing insurance programs. There are solutions out there that can help address these new risks. If you would like to learn more about the available coverage options and how they may fit within your clients’ risk management strategies, please reach out. SOURCES 1. [https://www.ibm.com/think/topics/history-of-artificial-intelligence](https://www.ibm.com/think/topics/history-of-artificial-intelligence) 2. [https://st.llnl.gov/news/look-back/birth-artificial-intelligence-ai-research](https://st.llnl.gov/news/look-back/birth-artificial-intelligence-ai-research) 3. [https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/insurance-generative-ai](https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/insurance-generative-ai) 4. [https://www.bain.com/insights/generative-ai-in-insurance/](https://www.bain.com/insights/generative-ai-in-insurance/) 5. [https://www.scnsoft.com/insurance/insurance-ai-trends?utm\_source=Google\_Search&utm\_medium=Paid&utm\_campaign=AB\_Insurance\_AI\_Trends\_US&campaignid=23567832872&adgroupid=194347772538&keyword=insurance%20generative%20ai%20trends&adposition=&gad\_source=1&gadcampaignid=23567832872&gbraid=0AAAAADL1kweLasLUeUgfqs8\_4ffIdLv1N&gclid=EAIaIQobChMIvOvapKPclAMVWUb\_AR1LwwX-EAAYBCAAEgK3KfD\_BwE](https://www.scnsoft.com/insurance/insurance-ai-trends?utm_source=Google_Search&utm_medium=Paid&utm_campaign=AB_Insurance_AI_Trends_US&campaignid=23567832872&adgroupid=194347772538&keyword=insurance%20generative%20ai%20trends&adposition=&gad_source=1&gadcampaignid=23567832872&gbraid=0AAAAADL1kweLasLUeUgfqs8_4ffIdLv1N&gclid=EAIaIQobChMIvOvapKPclAMVWUb_AR1LwwX-EAAYBCAAEgK3KfD_BwE) 6. [https://www.mckinsey.com/industries/financial-services/our-insights/the-future-of-ai-in-the-insurance-industry](https://www.mckinsey.com/industries/financial-services/our-insights/the-future-of-ai-in-the-insurance-industry) 7. [https://www.testudo.co/insights/the-state-of-play-generative-ai-litigation-market-overview-1-january-2026](https://www.testudo.co/insights/the-state-of-play-generative-ai-litigation-market-overview-1-january-2026) 8. [https://www.deloitte.com/us/en/insights/multimedia/videos/ai-insurance-market-potential.html](https://www.deloitte.com/us/en/insights/multimedia/videos/ai-insurance-market-potential.html) 9. [https://www.shumaker.com/insight/the-new-ai-coverage-fight-exclusions-endorsements-and-denied-claims/](https://www.shumaker.com/insight/the-new-ai-coverage-fight-exclusions-endorsements-and-denied-claims/) 10. [https://www.forbes.com/councils/forbesbusinesscouncil/2026/04/24/ai-is-making-cyberattacks-cheap-and-exposing-a-dangerousreadiness-gap/](https://www.forbes.com/councils/forbesbusinesscouncil/2026/04/24/ai-is-making-cyberattacks-cheap-and-exposing-a-dangerousreadiness-gap/) 11. [https://www.investmentnews.com/regulation-legal-compliance/ai-lawsuits-surge-to-dominate-securities-class-action-filingsin-2026/267629](https://www.investmentnews.com/regulation-legal-compliance/ai-lawsuits-surge-to-dominate-securities-class-action-filingsin-2026/267629) 12. [https://www.law.georgetown.edu/tech-institute/research-insights/insights/disney-nbc-universal-and-dreamworks-file-major-ip-lawsuitagainst-ai-image-generator-midjourney/](https://www.law.georgetown.edu/tech-institute/research-insights/insights/disney-nbc-universal-and-dreamworks-file-major-ip-lawsuitagainst-ai-image-generator-midjourney/) 13. [https://www.americanbar.org/news/abanews/aba-news-archives/2025/06/legal-risks-ai-speaking-for-business/](https://www.americanbar.org/news/abanews/aba-news-archives/2025/06/legal-risks-ai-speaking-for-business/) 14. [https://www.morganstanley.com/insights/articles/global-ai-race-us-vs-china-investment-opportunities](https://www.morganstanley.com/insights/articles/global-ai-race-us-vs-china-investment-opportunities) 15. [https://www.brookings.edu/articles/competing-ai-strategies-for-the-us-and-china/](https://www.brookings.edu/articles/competing-ai-strategies-for-the-us-and-china/) RT ProExec is a part of the RT Specialty division of RSG Specialty, LLC, a Delaware limited liability company based in Illinois. RSG Specialty, LLC, is a subsidiary of Ryan Specialty, LLC. RT ProExec provides wholesale insurance brokerage and other services to agents and brokers. RT ProExec does not solicit insurance from the public. 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In California: RSG Specialty Insurance Services, LLC (License #0G97516). ©2026 Ryan Specialty, LLC Topics: [Ryan Specialty,](https://blog.ryanspecialty.com/tag/ryan-specialty) [FEATURED,](https://blog.ryanspecialty.com/tag/featured) [RT Specialty,](https://blog.ryanspecialty.com/tag/rt-specialty) [Cyber Liability,](https://blog.ryanspecialty.com/tag/cyber-liability) [RT ProExec,](https://blog.ryanspecialty.com/tag/rt-proexec) [AI,](https://blog.ryanspecialty.com/tag/ai) [cyber](https://blog.ryanspecialty.com/tag/cyber) ## Related Content [![](https://blog.ryanspecialty.com/hs-fs/hubfs/Cyber%20Insurance%20Blog%20Image.png?width=352&name=Cyber%20Insurance%20Blog%20Image.png)](https://blog.ryanspecialty.com/iran-cyber-war-and-your-policy) [RT ProExec](https://blog.ryanspecialty.com/author/rt-proexec) [Iran, Cyber War and Your Policy: War Exclusions, Coverage Implications and What Policyholders Need to Know Now](https://blog.ryanspecialty.com/iran-cyber-war-and-your-policy) [![](https://blog.ryanspecialty.com/hs-fs/hubfs/AdobeStock_106410999.jpeg?width=352&name=AdobeStock_106410999.jpeg)](https://blog.ryanspecialty.com/may-2026-us-professional-executive-liability-insurance-market-report) [RT ProExec](https://blog.ryanspecialty.com/author/rt-proexec) [May 2026 U.S. Professional & Executive Liability Insurance Market Report](https://blog.ryanspecialty.com/may-2026-us-professional-executive-liability-insurance-market-report) [![](https://blog.ryanspecialty.com/hs-fs/hubfs/Dependent%20BI%20Blog%20Image%20(1).png?width=352&name=Dependent%20BI%20Blog%20Image%20(1).png)](https://blog.ryanspecialty.com/why-ai-hallucinates-and-why-thats-now-an-insurable-event) [RT ProExec](https://blog.ryanspecialty.com/author/rt-proexec) [Why AI Hallucinates, and Why That’s Now an Insurable Event](https://blog.ryanspecialty.com/why-ai-hallucinates-and-why-thats-now-an-insurable-event) - Company Show submenu for Company - [Who We Are](https://ryansg.com/who-we-are/) - [Our Companies](https://ryansg.com/who-we-are/#companies) - [Our Team](https://ryansg.com/who-we-are/#chairman) - Specialties Show submenu for Specialties - [Wholesale Brokerage](https://ryansg.com/company/rt/) - [Binding Authority](https://ryansg.com/company/binding/) - [Underwriting Management](https://ryansg.com/underwriting-management/) - Stay in Touch Show submenu for Stay in Touch - [Careers](https://ryansg.com/careers/) - [News](https://ryansg.com/news/) - [Contact](https://ryansg.com/contact/) Connect with us [Follow us on LinkedIn](https://www.linkedin.com/company/ryan-specialty-group/) [Follow us on Twitter](https://twitter.com/RSG_insurance) [Follow us on YouTube](https://www.youtube.com/channel/UCew824sPCrKcGoeGBbwFF4A) [SUBSCRIBE TO RYAN SPECIALTY NEWS](https://get.ryansg.com/email-subscription) © 2026 All rights reserved. - [LEGAL](https://ryansg.com/legal/) - [PRIVACY](https://ryansg.com/privacy/) - [EUROPEAN OPERATING MODEL](https://ryansg.com/ryan-specialty-group-europe-post-brexit-european-operating-model/)