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Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →An AI-related incident does not automatically make cyber insurance worthless. Whether a particular loss is covered depends on the policy’s definitions, exclusions, limits and endorsements, as well as what happened. Some wording may cover the loss, some may restrict or exclude it, and some may leave the answer unclear.
What would “worthless” mean for a cyber claim?
Usually, the practical concern is not that an AI event cancels an entire insurance policy. It is that an insurer may argue a particular loss falls outside coverage, or that an exclusion, sublimit or condition narrows what the policy will pay. The result depends on the contract and the incident; the word “AI” by itself does not resolve the claim.
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There is also no single, settled “AI threat” that automatically triggers an exclusion. AI systems are software and can themselves be targets of hacking or sabotage. Separately, AI may be involved in an incident or business decision that leads to a loss. Those scenarios can raise different questions about the policy language.
Does cyber insurance cover an AI-related loss?
The Lloyd’s Market Association (LMA) says AI is recognized as a subset of software under the computer-system definition used in its model cyber clauses. That observation applies to the model clauses, not every insurer’s issued policy. LMA stresses that coverage still turns on the wording actually used and the circumstances of the loss.
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For the model wordings it assesses, LMA groups potential AI exposure by how cyber coverage is treated. These are indicative categories, not a promise of coverage or a prediction about any specific claim.
| Cyber wording posture in the LMA assessment | Indicative AI exposure category | What the category tells a policyholder |
|---|---|---|
| Cyber risks are fully excluded | Low | The model wording leaves less cyber exposure for the policy to cover; other terms and the facts still matter. |
| A cyber exclusion has a write-back, or coverage is affirmed with a limitation | Medium | Some coverage may be restored or stated, but its scope depends on the write-back or limitation. |
| Coverage is granted without a cyber-specific restriction | High | The model wording has greater potential AI exposure, subject to the rest of the policy. |
“High” here describes potential exposure in LMA’s assessment, not the likelihood that an insurer will pay a claim. A policy can also contain restrictions elsewhere that affect the outcome.
What does “silent AI” mean?
Aon uses “silent AI” for policy wording that neither affirmatively covers nor excludes AI. Silence is an ambiguity category, not proof that the policy covers an AI-related loss or that it excludes one. The answer may depend on how existing terms—such as computer system, data, security failure and exclusions—apply to the technology and events involved.
When reviewing a policy, distinguish between three things: an explicit statement about AI, wording that addresses the relevant cyber event without mentioning AI, and a gap where the contract does not clearly say how the event is treated. Do not assume that a general reference to software settles every AI scenario.
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Could more than one insurance policy be relevant?
Yes. An AI-related loss may raise questions under more than one insurance line. Gallagher’s 2025 cyber insurance market outlook identifies possible exposure involving professional errors and omissions, employment practices, product liability and medical malpractice, in addition to cyber coverage. That list identifies potential lines to examine; it does not establish that any particular policy will respond.
For example, a loss involving an AI-enabled service might prompt separate questions about a cyber event and an alleged professional error. The facts, policy language and applicable jurisdiction determine which contracts are relevant and whether they respond. Avoid assuming that one policy’s answer automatically settles another’s.
How can you check whether your policy addresses AI?
Use the current contract, not a general description of the insurer’s product. Collect the declarations, base policy form and every endorsement, then review the relevant clauses together. Compare them with the expiring contract if you are renewing; a change in wording can matter even when the policy name has not changed.
- Find the operative documents. Obtain the current declarations, base form and all endorsements, including any amendments issued at renewal.
- Search for the relevant terms. Check definitions and provisions addressing AI, computer systems, data, security failure, cyber events, exclusions, write-backs, limits and conditions.
- Trace how the clauses fit together. Identify whether the policy affirmatively grants coverage, removes it through an exclusion, restores some through a write-back, or leaves the AI question unclear. Read limits and conditions alongside the grant and exclusion.
- Compare old and new wording. Note additions, deletions and changes to definitions, exclusions, carve-backs and limits rather than relying on a summary of the renewal.
- Ask about concrete scenarios. Ask your broker or coverage counsel to explain how the wording could apply to your organization’s AI systems and plausible incidents, and request clarity about which policy line may be relevant.
This review is practical guidance, not legal advice or a guarantee of coverage. A reliable answer for a particular loss requires the actual contract, jurisdiction and incident facts.
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What current market and regulatory material does—and does not—show
The available materials describe different jurisdictions and serve different purposes; they do not establish that all cyber policies now exclude AI. LMA’s assessment concerns its model cyber clauses, while Aon offers broker analysis of AI insurance approaches. Neither establishes the share of issued policies that exclude AI.
Gallagher’s 2025 outlook reported more than 200 actively litigated cases related to artificial intelligence and machine learning as of the report’s writing. That is a dated litigation count, not a count of insurance claims or a current 2026 total.
In the United States, the National Association of Insurance Commissioners (NAIC) reported in March 2026 that 12 participating states were piloting its AI Systems Evaluation Tool. The tool is intended to help regulators examine insurers’ use of AI, governance and risk mitigation; the pilot figure does not measure policy exclusions or AI-related claims.
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In European supervisory context, EIOPA’s September 22, 2022 statement said: “While there may be a limit to insurability, EIOPA is of the view that consumers and small businesses can assess the risks involved better – including those stemming from systemic events – when coverage is clear and aligned to the target market’s needs.” Its emphasis is on clarity in coverage, not a universal rule for how an AI loss must be treated.
Separately, UK government AI cybersecurity material addresses protecting AI systems against threats including hacking and sabotage. That is guidance about cybersecurity risk to AI systems; it does not determine insurance coverage for a particular attack.
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