Commercial General Liability Insurance AI Exclusions
Could New AI Exclusions in Your Commercial Liability Policy Leave Your Business Exposed?
Artificial intelligence has quickly become part of everyday business. Even if your company has never intentionally adopted ChatGPT or another AI platform, there’s a good chance you’re already using AI through software you rely on every day. Microsoft 365 Copilot, Google Workspace, Salesforce, HubSpot, Zoom AI Companion, Canva, Adobe Firefly, and countless other applications now incorporate generative AI to help businesses work more efficiently.
While these tools can improve productivity, they also introduce new legal and liability concerns. In response, the insurance industry is beginning to address those risks through new policy endorsements.
If your Commercial General Liability (CGL) policy has renewed recently—or will renew in the coming months—it’s worth taking a closer look at your policy. Depending on your insurance carrier, new AI-related exclusions may already be attached to your coverage.
Understanding these changes today can help prevent surprises after a claim occurs.
What Changed in Commercial General Liability Policies?
In January 2026, Verisk’s Insurance Services Office (ISO) introduced several optional Commercial General Liability endorsements addressing exposures created by generative artificial intelligence. ISO develops standardized policy forms that many insurance companies use as the foundation for their commercial insurance programs, although each carrier decides whether to adopt the forms and state regulators must approve their use.
Among the new endorsements are:
- CG 40 47 01 26 – Exclusion – Generative Artificial Intelligence
- CG 40 48 01 26 – Exclusion – Generative Artificial Intelligence (Coverage B Only)
- CG 35 08 01 26 – Exclusion – Generative Artificial Intelligence (Products/Completed Operations)
The broadest of these, ISO CG 40 47 01 26, excludes Coverage A (Bodily Injury and Property Damage) and Coverage B (Personal and Advertising Injury) for claims “arising out of generative artificial intelligence” when the endorsement is attached to a policy. That phrase—“arising out of”—has long been interpreted broadly in insurance coverage, making it especially important for businesses to understand whether this endorsement appears in their policy.
Not every insurance company has adopted these endorsements, and not every Commercial General Liability policy includes them. The only way to know is to review your declarations page and policy endorsements.
Your Business May Already Be Using AI
One of the biggest misconceptions is that AI only applies to companies using ChatGPT.
In reality, many businesses are already using artificial intelligence without realizing it.
Think about the software your employees use every day. AI has become integrated into email programs, customer relationship management systems, accounting software, marketing platforms, graphic design tools, recruiting software, customer service chatbots, and even video conferencing applications.
Your business may already be using AI if employees:
- Draft emails with Microsoft Copilot or Google Gemini.
- Create marketing materials using Canva or Adobe Firefly.
- Generate website content with ChatGPT or Claude.
- Screen job applicants using HR software with AI features.
- Analyze customer data through CRM platforms.
- Answer customer questions using AI-powered chatbots.
For many companies, AI has quietly become another business tool. That makes understanding your insurance coverage even more important.
Why Are Insurance Companies Addressing AI Now?
Insurance companies price coverage based on historical loss experience.
Generative AI is evolving faster than claims history can develop. Businesses are finding new ways to use AI almost daily, while courts are still determining how liability should be assigned when AI contributes to an error or injury.
Potential claims involving AI may include:
- Copyright infringement
- Defamation
- Privacy violations
- Inaccurate information generated by AI
- Bias or discrimination allegations
- Product liability
- Professional negligence
Rather than leaving those questions unanswered, many insurers are clarifying how their policies respond by adding endorsements that specifically address generative AI exposures.
What Could AI Exclusions Mean for Your Business?
Every claim depends on its own facts and the specific wording of the insurance policy. However, it’s easy to see why these endorsements deserve attention.
Imagine your business uses an AI chatbot to answer customer questions. A customer follows incorrect information provided by the chatbot and suffers an injury. If your Commercial General Liability policy contains an applicable AI exclusion, the insurance company may determine that coverage does not apply.
Or suppose your marketing department uses generative AI to create advertising content. A competitor alleges the content infringes on its copyrighted work. Depending on the policy language and endorsements attached, your insurer could evaluate whether the AI exclusion affects Coverage B for Personal and Advertising Injury.
Manufacturers and contractors may have additional concerns. If AI is incorporated into the design, development, or delivery of a finished product or completed work, Products and Completed Operations coverage could also be impacted if an applicable endorsement has been added.
These examples are meant to illustrate how AI-related claims could arise. Actual coverage always depends on the policy language and the facts surrounding a particular claim.
Does This Mean Every Business Needs AI Insurance?
Not at all.
Businesses use technology differently, and insurance solutions should reflect those differences.
A local retail store using AI to draft occasional social media posts has very different exposures than a software developer, engineering firm, healthcare provider, financial institution, or marketing agency whose services rely heavily on AI.
For some businesses, the discussion may end after confirming no significant exposure exists.
Others may benefit from reviewing cyber liability, technology errors and omissions, professional liability, or emerging specialty products designed to address AI-related risks.
The important first step is understanding what your current policies do—and do not—cover.
Questions Every Business Owner Should Ask
As AI becomes more common in business operations, it’s worth asking your insurance agent a few simple questions at your next renewal.
- Does my Commercial General Liability policy include any AI-related endorsements?
- Which ISO forms or carrier-specific endorsements have been added since my last renewal?
- Do my Cyber Liability or Professional Liability policies address AI differently?
- Are there any activities in my business that create new exposures?
- Should we document how our business currently uses AI?
These questions don’t necessarily lead to additional coverage. They simply help ensure everyone understands how the policy responds before a claim occurs.
Why an Annual Coverage Review Matters More Than Ever
Business operations rarely stay the same from year to year.
Companies hire employees, add services, adopt new software, expand into new markets, and embrace new technology. Insurance should evolve along with those changes.
AI is simply the latest example of how businesses are changing faster than many owners realize.
A routine coverage review gives you an opportunity to discuss operational changes, review new endorsements, and make informed decisions based on your company’s actual risks rather than assumptions.
Even if no changes are needed, documenting those conversations helps ensure everyone is working from the same understanding.
How Huff Insurance Can Help
Huff Insurance has been helping Maryland businesses manage risk since 1960.
As an independent insurance agency, we aren’t limited to one insurance company. Instead, we represent multiple highly rated insurance carriers, allowing us to compare coverage options and explain the differences between policy forms, endorsements, and exclusions in plain English.
If your business has recently adopted AI—or you’re simply unsure whether your current policies include AI-related endorsements—we’re happy to review your coverage with you.
Our goal isn’t to create unnecessary concern. It’s to help you understand your policy so you can make informed decisions about protecting your business.
Frequently Asked Questions Regarding AI Exclusions
Do all Commercial General Liability policies now contain AI exclusions?
No. The ISO endorsements are optional. Each insurance company decides whether to adopt them, subject to state regulatory approval. Some insurers may use ISO language, while others may develop their own endorsements.
How can I tell if my policy includes AI exclusions?
Review the endorsements attached to your Commercial General Liability policy. Your independent insurance agent can also help identify whether AI-related endorsements have been added at renewal.
Does using Microsoft Copilot or ChatGPT automatically create a coverage problem?
Not necessarily. Simply using AI doesn’t determine whether a claim would be covered. Coverage depends on your policy language, the endorsement attached, how AI is used, and the facts of any claim.
Should every business buy standalone AI liability insurance?
No. Some businesses have very limited AI exposure, while others rely heavily on AI in delivering products or services. An insurance review can help determine whether your current coverage is appropriate for your operations.
Why should I work with an independent insurance agent?
An independent insurance agent represents multiple insurance companies rather than just one. That allows your agent to compare coverage options, explain differences between policy forms, and help you find insurance that fits your business’s needs. Huff Insurance has proudly served Maryland businesses as an independent insurance agency since 1960.
About The Author: Jerry Nicklow
Jerry Nicklow has worked in the insurance industry since 1995 and has written insurance marketing and educational content since 2008. He holds the API, AAI, and AIS designations from the Insurance Institutes. He has also appeared on insurance industry podcasts, and is the creator of Real Insurance Talk, where he explains insurance in plain terms through articles and his YouTube channel to help individuals and business owners better understand coverage and risk.