CFC has introduced affirmative artificial intelligence coverage across seven commercial insurance products as insurers confront growing questions over how policies respond to AI-related risks.
The update adds explicit AI language to technology errors and omissions, professional liability, eHealth, intellectual property, management liability, media and cyber proactive response policies. CFC said the changes are intended to clarify coverage treatment rather than rely on silent or implied protection.
The move comes as insurers review how existing policies respond to AI-related risks across commercial lines. Brokers and underwriters have faced growing questions over coverage certainty as businesses expand their use of AI tools.
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The insurance market has devoted greater attention to so-called "silent AI" exposure, where policies neither expressly cover nor exclude AI-related risks. Insurers have introduced AI endorsements and revise policy wording across cyber, professional liability, and management liability lines. The objective is to reduce uncertainty around claims and coverage obligations as AI use expands.
The issue extends beyond policy wording. Brokers have increasingly had to assess whether existing insurance programmes adequately address AI-related exposures or require additional endorsements and coverage clarification.
Nick Line, chief underwriting officer at CFC, said AI has become part of day-to-day business activity and increasingly interacts with risks that insurers have traditionally covered.
"Our focus has been on giving clients and brokers clarity within our policies," he said. "Rather than relying on implied or silent coverage, we see value in being explicit about how AI is treated."
The programme includes language that addresses model hallucinations, AI-generated content and model drift, all of which have emerged as areas of concern for insurers and policyholders. These exposures have become a growing area of concern as companies incorporate AI into business processes.
The issue has prompted wider reviews of policy wording across the insurance sector. Industry participants have reported that insurers are reassessing AI-related exposure, with much of the immediate focus on coverage definitions and contract language rather than pricing. The discussion has become particularly prominent in cyber insurance because AI can affect both the frequency and severity of losses.
The review of AI-related wording reflects a broader market shift as insurers seek to avoid the uncertainty that previously surrounded silent cyber exposures.
Line said much of the industry's discussion around AI has focused on cyber insurance, although the technology affects a wider range of commercial risks.
"While much of the market discussion around AI has centred on cyber insurance, we have taken a broader approach that integrates coverage across multiple products, reflecting the true breadth of its impact on business risk," he said.
For brokers, affirmative wording may reduce uncertainty during placement discussions and claims disputes, particularly when clients use AI tools across multiple business functions. Questions around coverage applicability have become more common as businesses deploy emerging technologies.
Not all insurers have taken the same approach. Some carriers have explored AI-related exclusions because of concerns over accumulation risk and uncertainty surrounding future liabilities. The differing strategies illustrate how insurers are still assessing the long-term impact of AI on commercial insurance portfolios. The differing approaches also create challenges for brokers, who must compare policy wordings carefully as insurers adopt different positions on AI-related exposures.
The development highlights a wider challenge for the sector. Insurers continue to assess whether existing policy frameworks adequately address AI-related liabilities as regulation, litigation and business adoption evolve. Coverage certainty has become a growing focus for brokers, underwriters and risk managers as the market's approach to AI continues to develop.
