2026-10-29 · Source: Insurance Business US
Summary in 3 Points • Many clients mistakenly believe their cyber insurance covers AI risks, leading to potential gaps in coverage. • Misleading marketing from carriers can create confusion about AI coverage in cyber and tech E&O policies. • Brokers must educate clients on the nuances of AI coverage to avoid costly errors and misunderstandings. --- A significant misconception among clients is that having cyber insurance automatically includes coverage for AI-related risks. Jennifer Wilson from WTW highlighted that AI is a technology, not a peril, which complicates claims processes when losses occur. Misleading marketing from some carriers can further confuse policyholders, as they may believe they have comprehensive AI coverage when, in fact, it may be limited or non-existent under their cyber policies. Brokers play a crucial role in bridging the knowledge gap for clients, ensuring they understand the distinctions between various policies, including tech E&O and media liability. As clients increasingly rely on AI for decision-making, the risk of errors and omissions (E&O) exposures rises. Wilson's experience with a client who received a significantly cheaper quote underscores the importance of understanding policy details, as critical coverages may be overlooked, leading to potentially costly consequences for businesses. Brokers must navigate the complexities of AI coverage in cyber insurance, as misleading carrier marketing can lead to significant gaps in client protection.
Brokers must navigate the complexities of AI coverage in cyber insurance, as misleading carrier marketing can lead to significant gaps in client protection.