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Coverage
If your business uses generative AI — chatbots, copilots, content tools, or AI agents — its outputs can create liabilities your existing policies were never written to cover. AI liability insurance is the policy built for that exposure, and we place it with specialist markets.
More of your business than you might think.
Generative AI means systems that produce new output — text, images, code, decisions, actions — from prompts and data: chatbots and support copilots, virtual assistants, content and image generators, coding assistants, and agentic AI that takes actions without a human signing off each one.
You do not have to build AI to carry AI risk — using it is enough.
The exposure is rarely dramatic. It starts with ordinary, everyday AI use.
A customer relies on a price, policy or answer your AI assistant gave them, and it was wrong. The loss is theirs; the claim is yours.
AI-generated copy, images or code reproduce someone else's protected work, and the infringement claim lands on the business that published it.
Staff paste client data into an AI tool, or a chatbot surfaces information it should never have shared.
Agentic AI sends, books, updates or deletes something on its own — and a third party pays for the mistake.
Investigations and actions under a fast-growing body of AI laws covering disclosure, bias and automated decisions.
A licensed specialist can tell you where your current cover stops.
Talk to a specialistFinancial loss suffered by a third party arising from an error in a generative AI output.
Copyright, trademark, defamation, libel and slander arising from a generative AI output.
Liability from protected information exposed through generative AI use.
Bodily injury arising from your use of generative AI.
Property damage arising from your use of generative AI.
Defense of investigations or civil actions brought by a regulator under AI laws.
Coverage responds to alleged as well as actual damages — and can be structured across all six areas or only the ones that fit your risk.
Most business policies were written before generative AI existed. Here is where the gaps tend to sit.
| Risk | General liability | Cyber | Technology E&O | AI liability |
|---|---|---|---|---|
| Customer relies on a wrong AI answer | Typically not covered | Typically not covered | Varies by wording | Built for it |
| AI output infringes IP or defames | Limited, often excluded | Typically not covered | Varies by wording | Built for it |
| Data exposed through an AI tool | Typically not covered | May respond in part | Varies by wording | Built for it |
| Regulator investigates your AI use | Typically not covered | Limited | Typically not covered | Built for it |
Every policy is different - we review your existing cover against how you actually use AI.
Any business whose AI touches customers, content, data or decisions.
AI features shipped to customers.
Law, accounting and consulting firms drafting with AI.
AI-generated copy, imagery and campaigns.
AI in patient communication and intake.
AI in advice, underwriting and support.
Chatbots answering customers around the clock.
AI in screening, hiring and workforce decisions.
If it talks to customers, it can create liability.
AI liability works alongside cyber and technology E&O - cyber responds to breaches and attacks, technology E&O to failures in your services, AI liability to what your AI produces and does. Most AI-using businesses need at least two of the three.
AI liability insurance is a policy built for the liabilities that generative AI outputs can create — financial loss from output errors, intellectual property and personal injury claims, unauthorized data disclosure, bodily injury, property damage and regulatory actions under AI laws. It responds to alleged as well as actual damages.
Usually not fully. Those policies were written before generative AI, and AI output errors, AI-related IP claims and AI regulatory actions commonly fall outside them — or are now being explicitly excluded. A purpose-built AI liability policy is written for that exposure.
Any business using generative AI — customer-facing chatbots, internal copilots, AI-generated content, agentic AI, or AI products you build. You do not have to build AI to carry AI risk; using it is enough.
An output error is a mistake in what the AI produces that someone relies on. A chatbot quotes a customer the wrong price and the customer holds you to it, or an AI-generated report contains an error a client acts on and suffers a financial loss.
It can cover the defense of investigations or civil actions brought by a regulator under AI laws. AI regulation is moving fast, which makes defense cover for regulatory actions increasingly important.
Markets set the premium, not us, based on how you use AI, the data it touches, the controls you have in place, your revenue and the limits you choose. We shop your risk to specialist markets and bring back the strongest options. Quotes are free with no obligation, and a licensed specialist reviews your request.
A claims-made policy responds to claims first made while the policy is in force. The retroactive date is the earliest date the underlying AI use or output can have happened and still be covered — anything before it is outside the policy. Keeping that date continuous when you renew or change markets protects your past AI use.
Human review reduces the risk; it does not remove it. Reviewers miss errors, and many businesses have more AI acting autonomously — sending emails, updating records, answering customers — than they realize.
Use the quote form on this page or email Info@BlackfireInsurance.com. A licensed agent will walk you through the underwriting questions and take your risk to specialist markets.
No - cyber covers breaches, attacks and data incidents; AI liability covers harm caused by what your AI outputs or does, including errors, infringement and regulatory actions. Many businesses carry both.
Yes - coverage follows your business's use of generative AI, whether you built the system or license it from a vendor.
A growing patchwork of state AI laws covering disclosure, bias and automated decision-making, plus the EU AI Act for businesses serving European customers - the area is moving quickly, which is exactly why regulatory defense coverage matters.
