Insurers Push to Cap Liability for AI System Failures

Three leading insurers—AIG, Great American, and WR Berkley—are pursuing regulatory approval to limit their liability for claims tied to artificial intelligence technologies, a move that could reshape the risk landscape for businesses deploying AI systems. This development arises from mounting industry concern that unbounded AI-related exposures could result in massive claims, threatening the viability of traditional policies.

For claims adjusters, this signals a critical shift in how AI-related losses might be assessed and adjudicated. If approved, liability caps could alter the structure of commercial policies, influence how losses are allocated, and increase pressure on businesses to implement strict governance over AI systems. Adjusters will need to navigate complex new exclusions and carefully interpret policy language related to automated systems, particularly in areas like cybersecurity, customer service automation, and algorithmic decision-making.

Additionally, this move could prompt a surge in demand for tailored or excess liability coverage specific to AI risks. Claims professionals should monitor these changes closely, as the evolving risk environment will affect how claims are filed, negotiated, and paid out across multiple sectors increasingly reliant on AI technologies.