Verisk AI Exclusions in Commercial GL: What Brokers Need to Know Before the Next Renewal
Verisk's Insurance Services Office (ISO) filed AI exclusion endorsements for commercial general liability policies starting in 2023, and carriers have been incorporating them into renewals ever since. The practical effect: bodily injury, property damage, or personal and advertising injury caused by or resulting from AI in the insured's operations or products may no longer be covered under the CGL — even where the underlying incident would otherwise qualify as a covered occurrence. Brokers who haven't audited client CGL forms for AI exclusion language are exposed to an E&O claim the moment a denied loss makes that gap visible.
What ISO Filed and What It Excludes
Verisk's ISO files standardized endorsement language that member carriers can adopt when filing rates and forms with state insurance departments. The AI exclusion endorsements ISO developed are structured as CGL endorsement forms that carriers attach to the standard ISO CG 00 01 base policy at issuance or renewal.
The exclusions typically define "artificial intelligence" broadly — capturing machine learning systems, generative AI, autonomous decision systems, expert systems, and natural language processing tools — and then exclude coverage for losses caused by or resulting from AI used in the insured's operations, products, or services. The scope spans all three CGL insuring agreements:
Coverage A — Bodily Injury and Property Damage. Claims for physical harm or property damage where the AI system in the insured's operations or products contributed to the loss. A manufacturer using AI-based quality control that misses a defect causing product injury, a logistics company whose AI routing system contributes to a vehicle accident, a facility using AI-controlled equipment that causes a worker injury — all face Coverage A denial under a broadly written AI exclusion.
Coverage B — Personal and Advertising Injury. Claims for defamation, copyright infringement, privacy violations, and similar offenses where the harm arises from AI-generated content or AI-mediated communications. A business using generative AI to produce marketing copy later alleged to be defamatory or to infringe a copyright may find that Coverage B's response is barred if the AI generated the offending material.
Products Liability (Coverage A Extension). AI-enabled products that cause bodily injury or property damage after sale or distribution. Any business selling, distributing, or licensing a product with an integrated AI component — hardware, software, or a combination — faces products liability exposure that AI exclusions may remove from the CGL.
The precise language, defined terms, scope carve-outs, and effective dates vary by carrier and by state. Some carriers adopt ISO language verbatim; others file proprietary AI exclusion endorsements with narrower or broader definitions of what qualifies as "artificial intelligence." Reading the actual policy form is not optional — carrier-filed language governs, and no two carriers' AI exclusions are identical.
Who Is Most Exposed
Not every commercial client faces equal exposure. The risk is highest for clients who:
Sell or license AI-enabled products. Any business that delivers an AI-integrated product to customers — software companies, tech-enabled professional services, AI-embedded hardware — faces the broadest exposure. Products liability for AI-caused harm in a product context is the clearest and most commercially significant gap created by these exclusions.
Use AI in high-consequence physical operations. Clients whose AI systems touch physical operations — warehouse robotics, autonomous vehicle routing, AI-assisted construction site monitoring, manufacturing process control — face Coverage A exposure if an AI system contributes to bodily injury or property damage. These are also the clients most likely to have large CGL limits that carriers notice.
Use AI in customer-facing communications. Clients generating marketing materials, customer correspondence, or public-facing content with generative AI face Coverage B exposure for AI-authored defamation, copyright infringement, or privacy violations. This includes a wider range of businesses than many brokers realize: a restaurant chain using AI to write social media posts, a law firm using AI to generate client updates, a retailer using AI product descriptions.
Operate in sectors with active AI litigation. Healthcare, financial services, employment, and consumer lending clients face heightened claim frequency because regulators and plaintiffs are actively pursuing AI-related liability in those industries. The claim environment matters: clients in high-claim industries are more likely to actually trigger the exclusion.
Lower-risk clients are those using AI only as an internal productivity tool — drafting internal memos, analyzing proprietary datasets — where no AI output reaches external parties and no AI system controls physical processes.
The Coverage Stack Problem
The core problem for brokers is the cascade: the CGL excludes AI-caused losses, and no other policy in a standard commercial program automatically fills the gap.
E&O / Professional Liability responds to professional service errors but typically requires a professional services relationship. A product manufacturer or retailer does not automatically have tech E&O. Even for clients who do have E&O, many carriers have added AI exclusions to professional liability renewals, creating a potential double-exclusion scenario where both the CGL and the E&O carve out the same AI exposure.
Cyber Liability responds to data events — unauthorized access, data breach, ransomware, system failure resulting in a network security event. Bodily injury from an AI-controlled machine, a defamatory AI-generated advertisement, or a financial loss from an AI decision error are not data events. Cyber policies do not fill the CGL AI exclusion gap for physical harm or Coverage B claims.
Product Liability Endorsements or Standalone Products Policies may address Coverage A bodily injury for AI-enabled product defects, but this requires proactive placement and underwriting that addresses AI specifically. Standard products coverage does not automatically overcome an AI exclusion endorsement on the CGL.
Standalone AI Liability Coverage is available from a small number of specialty and E&S carriers for high-risk AI use cases, but is not broadly available across all risk profiles, revenue bands, or industries.
For a complete picture of how the entire coverage stack interacts with AI-related claims — E&O, CGL, and cyber — see How to Place AI Liability Insurance for Clients Using AI in Their Business.
How to Identify AI Exclusions in Client Policies
AI exclusion reviews should be a standard part of every CGL renewal audit for clients with material AI use. The practical workflow:
Pull the declarations page and endorsement schedule. AI exclusions appear as endorsements, not in the base CG 00 01 form. The endorsement schedule lists every modification to the base policy. Look for endorsement titles referencing "artificial intelligence," "AI," "automated systems," "machine learning," "technology operations," or similar language. ISO endorsement numbers in the CG 21 and CG 24 series are common locations for exclusion endorsements, but carrier-proprietary endorsements may use different numbering.
Read the definition of "artificial intelligence." The definition governs what AI use is captured. Some definitions are narrow — limited to fully autonomous systems taking action without human oversight. Others are broad enough to capture any software that uses statistical modeling, pattern recognition, or learned parameters to produce outputs. A client using a basic recommendation algorithm could be captured by a broad definition; a client using a sophisticated autonomous agent could fall outside a narrow one. The definition, not the business's self-assessment of their AI sophistication, controls.
Check for carve-backs. Some AI exclusion forms include exceptions: AI used only for analysis (not action), AI with a documented human review layer, or AI applications in specific low-risk contexts. If a carve-back exists, assess whether the client's specific AI use falls within it.
Review the effective date. AI exclusions are endorsements added at renewal — they do not retroactively modify policies already in force. A client whose CGL renewed in January 2026 may have an AI exclusion that a client whose policy was last renewed in March 2025 does not. The next renewal date for every AI-active client is the key trigger for this review.
Document the gap. If an AI exclusion applies and no replacement coverage is in place, document the coverage gap in the renewal memo and obtain written acknowledgment from the client. This is standard E&O practice — a broker who identifies a gap and documents a client's informed decision to accept it is in a materially different position than one who never reviewed the form.
Coverage Alternatives for AI-Exposed Clients
Technology Professional Liability (Tech E&O). The most direct alternative for clients providing AI-enabled technology services, software, or data products. Tech E&O covers claims that the client's technology services caused a financial loss due to errors, failures, or omissions — matching the professional service framing that CGL professional services exclusions and AI exclusions combine to remove. Appropriate for software developers, SaaS companies, data analytics firms, AI vendors, and professional services firms heavily reliant on AI in client deliverables. For how CGL and professional liability divide coverage responsibilities, see CGL vs Professional Liability: What Each Policy Covers and Why Most Professional Service Businesses Need Both.
AI Liability Endorsements. Some carriers offer endorsements that restore coverage excluded by the AI exclusion, subject to sublimits, deductibles, and specific conditions. These are carrier-specific — ISO has not yet standardized an AI liability restoration endorsement — so availability, terms, and pricing vary by carrier. Brokers should ask carrier reps directly what AI-specific endorsement options exist for a given risk profile before going to market.
Standalone AI Liability Policies (E&S Lines). For clients where AI is central to the business model and the CGL gap cannot be addressed by endorsement or tech E&O, standalone AI liability coverage is available through specialty and E&S carriers. This market is appropriate for clients with autonomous AI operations, high-volume AI decision-making, or AI systems where harm at scale is plausible. For a placement framework covering agentic and autonomous AI use cases specifically, see Agentic AI and Autonomous Systems Liability Insurance: What Brokers Need to Know in 2026.
Umbrella / Excess Liability. Confirm whether the umbrella follows form on AI exclusions. Many umbrella policies follow the underlying CGL endorsements, meaning an AI exclusion in the CGL may flow through to the umbrella. Verify umbrella form language before assuming the umbrella provides coverage the CGL no longer does.
The Broker's E&O Exposure
The broker E&O scenario writes itself: a client with AI operations suffers an AI-related bodily injury or Coverage B claim, files with their CGL carrier, receives a denial citing the AI exclusion that has been on the policy since the last renewal, and discovers that their broker never reviewed for the exclusion, never disclosed the gap, and never proposed replacement coverage. The broker's E&O insurer evaluates whether identifying AI exclusions in commercial CGL renewals constituted a reasonable standard of care for a commercial lines broker in 2026.
By 2026, AI exclusions have been in the commercial insurance market for roughly two years. Awareness of Verisk's filing and carrier adoption has been covered in trade media, carrier bulletins, and IIABA guidance. A broker who cannot demonstrate that AI exclusion reviews were part of their renewal workflow for commercial accounts with material AI operations faces meaningful E&O exposure if a denied claim surfaces.
The documentation standard is not complicated:
- Review the CGL endorsement schedule at every renewal for clients with AI in their operations
- If an AI exclusion is present, identify whether existing policies fill the gap
- If a gap remains, propose a solution — tech E&O, an AI endorsement, or standalone coverage
- If the client declines the coverage solution, obtain written acknowledgment of the uninsured exposure
- Document all steps in the client file
Frequently Asked Questions
Are Verisk AI exclusions now standard across all CGL carriers?
No. ISO files endorsement language that member carriers may adopt, but each carrier independently decides whether to adopt ISO language verbatim, adapt it, or file proprietary exclusion language. A number of major commercial carriers have adopted some form of AI exclusion for CGL, but adoption is not universal and the definitions, scope, and effective dates vary significantly. Never assume ISO standard language applies — read the actual policy endorsement schedule.
Do AI exclusions apply to policies already in force, or only on renewal?
Only on renewal. AI exclusions are endorsements added when a policy is issued or renewed — they cannot be retroactively added to an in-force policy mid-term. A client whose CGL is currently in force without an AI exclusion will not face the exclusion until the next renewal. Brokers should flag renewal dates for AI-active clients and schedule the endorsement review before the renewal offer arrives.
My client uses AI only for internal productivity tools — are they exposed?
Probably not, depending on the exclusion's language. Many AI exclusion forms are focused on AI that touches external parties: AI in products sold to customers, AI in customer-facing communications, AI in operations that could cause third-party harm. Internal productivity AI — drafting internal documents, summarizing data — that never touches customer deliverables or physical operations may fall outside a narrowly written exclusion. But this assessment requires reading the actual definition; do not assume based on the client's characterization of their AI use as "low risk."
What if both the CGL and the E&O now contain AI exclusions?
This is the double-exclusion scenario, most relevant for AI-native companies and professional services firms selling AI-enabled services. If both the CGL and E&O carve out AI, the coverage gap is comprehensive — no standard admitted policy responds. This scenario typically requires a standalone AI liability policy, an E&S tech E&O placement that does not include an AI exclusion, or a custom AI endorsement negotiated with underwriting. Document the gap clearly and price the replacement coverage before binding.
Does the AI exclusion affect umbrella or excess liability coverage?
Often yes. Many umbrella policies follow form — meaning they adopt the same exclusions as the underlying CGL. If the CGL AI exclusion flows through to the umbrella, the client's aggregate limits for AI-related claims are effectively eliminated across the entire tower. Confirm umbrella form language at each renewal and ask the umbrella carrier directly whether the AI exclusion in the underlying CGL is adopted.
How is an AI liability endorsement different from a standalone AI liability policy?
An AI liability endorsement is a modification to an existing policy — most often a CGL, tech E&O, or cyber policy — that restores or expands coverage for AI-related claims, subject to sublimits and specific conditions. It is typically carrier-specific and not broadly standardized. A standalone AI liability policy is a separate policy purpose-built for AI-related exposure, issued on its own form with its own limits, triggers, and exclusions. Standalone policies are appropriate for clients where AI exposure is the primary or dominant risk in the program; endorsements are appropriate for clients where AI is a meaningful but secondary exposure within an otherwise conventional commercial risk.
How Arvori Helps
Arvori helps insurance brokers identify coverage gaps, prepare client-facing renewal documentation, and connect with markets for specialty AI liability coverage. If you're navigating AI exclusions and need help structuring client conversations or identifying placement options, reach out to the Arvori team.