CFC has launched affirmative AI coverage within its intellectual property policy, providing explicit confirmation that IP claims involving AI can remain covered where they would otherwise meet the policy's existing coverage requirements.
The insurer said the wording is designed to remove ambiguity without changing the underlying scope of the policy.
The update addresses exposures CFC said can arise throughout the AI lifecycle, from the data used to train a model and the algorithms underpinning it, to the content and other outputs it generates. It also reflects a market in which responsibility for alleged infringement may fall on the business deploying or using an AI system, rather than solely on the technology provider itself, a distinction that matters given how varied and unsettled the legal treatment of AI-related IP questions, covering training data, ownership, infringement and liability, remains across different jurisdictions.
This launch completes a commitment CFC made publicly in June 2026, when chief underwriting officer Nick Line announced a broader programme to embed affirmative AI coverage across seven of the insurer's core products: technology errors and omissions, professional liability, eHealth, intellectual property, management liability, media, and its Cyber Proactive Response policy.
Line said at the time that AI now interacts with the same risks insurers have always covered, and that CFC's approach was to be explicit about how AI is treated in its wordings rather than relying on implied or silent coverage, describing AI as "an accelerant of existing risk" rather than a wholly new category requiring separate products.
The IP update announced this week delivers on that specific piece of the June programme.
The IP policy itself was substantially rebuilt and simplified by CFC in May 2025, when Maddi Brown (pictured), the insurer's IP practice leader, introduced broader worldwide coverage including defence and pursuit of infringement claims, protection for loss of future profits, IP title pursuit disputes and employee misappropriation of trade secrets.
Brown said AI is creating enormous opportunities for businesses but is also introducing new and increasingly complex intellectual property risks, with questions arising at every stage of the AI lifecycle, from training data and the underlying technology to the outputs it produces.
She said the legal and regulatory position remains uncertain and varies significantly across jurisdictions, making it difficult for businesses to assess their exposure, and that as AI investment and innovation continue, businesses are also likely to place greater emphasis on protecting and enforcing the intellectual property rights tied to these technologies.
Brown added that the affirmative wording gives policyholders greater clarity by confirming that where an AI-related IP claim would otherwise be covered, the involvement of AI alone does not create uncertainty around how the policy responds.
"While no one can predict exactly how the relationship between AI and intellectual property will develop, we can give businesses confidence that they have specialist protection in place as they adopt the latest AI tools," she said.
CFC's announcement lands just days after Beazley confirmed its own affirmative AI wording within its cyber and technology errors and omissions policies, with Beazley's group head of cyber risks, Alessandro Lezzi, framing that update in almost identical terms: reducing uncertainty for clients by explicitly addressing AI-related risks already covered within existing policies, rather than leaving coverage to be inferred.
Beazley's own research found 35% of global executives are investing in AI to strengthen operational resilience and 33% are increasing cybersecurity spending, with 80% of senior decision-makers believing AI will have a positive impact on business performance overall, context that helps explain why insurers are moving to clarify wording now rather than waiting for case law to settle the underlying legal questions.
The broader market has moved in the same direction across several product lines this year. Google Cloud's Risk Protection Program, in partnership with Beazley, Chubb and Munich Re, already offers affirmative AI coverage specifically for Google Cloud-related AI workloads, using cloud configuration telemetry to assess underwriting eligibility, while Coalition, AXA XL and several MGAs have introduced their own affirmative AI endorsements across cyber and technology liability lines over the past year.
What distinguishes this wave of affirmative AI wording from a genuinely new insurance product is the insurers' own consistent framing: none of CFC, Beazley or the Google Cloud programme partners are describing these updates as expanding what's covered, only as making explicit what they say was already implicitly covered under existing policy language. That distinction matters for brokers advising clients, since an affirmative AI endorsement resolves ambiguity about how a claim will be treated, but it doesn't substitute for checking whether the underlying policy's scope, limits and exclusions actually match a client's specific AI use case, particularly for businesses whose AI exposure sits at the more novel end of the spectrum CFC itself flags, disputes over training data and model outputs, rather than the more conventional infringement claims IP insurance has always covered.
