Berkshire and Chubb Just Won Approval to Drop AI Coverage

Key Takeaways

• Regulators approved over 80% of AI exclusion filings.
• Berkshire, Chubb, Travelers, AIG adopt new ISO CGL endorsements.
• Exclusions apply to general liability, D&O, and E&O lines.
• Potential $15B AI liability specialty market mirrors 1990s cyber carve-out.

Pulse Analysis

The wave of artificial‑intelligence‑related lawsuits that began in 2024 forced major insurers to confront a gap in traditional liability coverage. In April 2026, state insurance regulators in Florida, Connecticut and Maryland gave the green light to more than 80 % of AI exclusion filings submitted by Berkshire Hathaway, Chubb, Travelers and AIG. The approvals hinge on three new ISO commercial general liability endorsements—CG 40 47, CG 40 48 and CG 35 08—supplemented by carrier‑specific clauses such as Berkshire’s PC 51380 for directors‑and‑officers and errors‑and‑omissions lines. This regulatory endorsement effectively codifies insurers’ ability to carve out AI risk from standard policies.

The immediate consequence is a shift in pricing dynamics for property‑and‑casualty (P&C) carriers. With AI exclusions now enforceable, brokers must price the residual exposure separately, echoing the early 1990s cyber carve‑out that later blossomed into a $15 billion specialty market. Analysts predict that mid‑2026 renewal cycles will see a surge in demand for stand‑alone AI liability products, as insureds seek coverage for algorithmic errors, data‑bias claims and autonomous‑system failures. Premiums are likely to command a risk‑adjusted loading that reflects both the nascent nature of the exposure and the limited loss history.

For senior P&C executives, the end of the “silent AI coverage era” creates both a challenge and an opportunity. Companies must reassess their underwriting guidelines, ensure that exclusion language is clear and defensible, and invest in analytics to monitor AI‑related loss trends. At the same time, insurers that can design agile, data‑driven AI liability solutions stand to capture a fast‑growing niche and differentiate themselves from competitors still relying on blanket exclusions. The regulatory precedent set this spring is likely to become a template for other states, accelerating the maturation of the AI liability market nationwide.