Your Team Is Using AI. Is Your Insurance Program Keeping Up?
AI-enabled tools are increasingly finding their way into manufacturing, construction, and everywhere in between, from estimating and takeoffs to scheduling, design support and project communications.
At the same time, insurance carriers are beginning to change how they address those exposures.
A nationwide review of public insurance filings identified 4,078 state-level records involving generative AI exclusions across 49 states and the District of Columbia through July 31, 2026. Of those, 2,369 had already reached their effective dates. The analysis found that 3,955 of the 4,078 records involved coverage lines contractors and other businesses commonly purchase, including general liability, umbrella and excess liability, commercial package, businessowners and errors and omissions coverage. [1]
That does not mean these exclusions are already sitting on 2,369 policies. However, it does tell us that the market is preparing to change.
Why should insureds care?
The Insurance Services Office (ISO) has introduced several generative AI exclusion endorsements for commercial liability policies.
According to Verisk, one of the broadest, CG 40 47 01 26, excludes coverage for bodily injury, property damage and personal and advertising injury "arising out of" generative artificial intelligence. Other ISO forms address Coverage B and products and completed operations exposures. [2]
ISO published those forms in July 2025, and carriers began filing them roughly a month later. That timing matters: any policy renewed since August 2025 may already carry one of the ISO forms or a carrier-drafted equivalent. [1]
That creates an important question:
What happens when AI becomes part of the process that ultimately contributes to a loss?
For the construction industry, uses including AI-assisted estimating and quantity takeoffs, scheduling, safety analytics, project communications and design support are areas contractors should evaluate as these exclusions begin appearing. [3]
Consider a few potential scenarios.
▸ An estimator relies on an AI-supported tool for a takeoff or estimate and an error contributes to a project loss.
▸ A contractor uses AI as part of a design-related recommendation or calculation that later contributes to property damage.
▸ A marketing team uses AI-generated content that results in a copyright, defamation or advertising injury allegation.
These scenarios do not automatically mean coverage would be excluded. Coverage will depend on the specific facts, policy wording and applicable law.
But they show why insureds need to understand both where AI is being used and what their insurance policies say about it.
The issue: AI adoption is happening faster than risk management
Many companies may have more AI usage than leadership realizes.
Employees are experimenting with generative AI tools. Existing software platforms are adding AI functionality. Engineers, estimators, project managers and administrative teams are finding ways to automate repetitive work.
Much of that adoption can happen organically rather than through a formal company-wide AI strategy.
That creates a potential disconnect.
Your people may be expanding their use of AI while your insurance carrier is simultaneously changing how it intends to cover losses involving AI.
That is something we believe contractors should get ahead of now.
What we recommend
✓ Understand where AI is being used.
Talk with estimating, operations, project management, marketing and IT. Identify which tools employees are using and where AI-generated output could influence estimates, takeoffs, specifications, design, safety decisions or completed work.
Higher-risk uses deserve more attention than routine administrative tasks.
✓ Review your policies for new AI language.
Do not assume your renewal policy is identical to last year's policy.
AI exclusions and limitations should become part of the review process for general liability, umbrella and excess liability, professional liability and other relevant coverages.
The important question is not simply whether an exclusion exists. It is how broadly it is written and how it interacts with the way your organization actually uses AI.
✓ Review the full liability program.
The primary policy is only one piece of the equation.
The filing analysis identified generative AI exclusions across primary, umbrella and excess coverage. Insureds should review the language across the full liability program and understand whether the layers continue to work together as intended. [1]
✓ Put basic guardrails around AI.
A 50-page AI policy is not necessary; however, you do need clarity around approved tools, appropriate uses, human review and situations where an AI-generated answer should not be relied upon without verification.
✓ Make AI part of the renewal conversation.
Your insurance advisor should understand how your company is using AI before approaching the marketplace.
This needs to become part of the normal operational discussion with your broker, just like changes in revenue, payroll, subcontracting, equipment, contracts or geographic expansion.
Our view
AI is exciting, and used correctly, it can improve productivity, make teams more efficient and allow good people to spend more time on higher-value work (we're figuring this out in our own shop too).
But new technology and risk management need to move together.
The insurance market is already beginning to address generative AI exposure. The filing analysis also found that the admitted-market filings it reviewed did not identify a standalone generative AI product that simply replaces the contractor coverage potentially removed by these exclusions. [1]
That makes policy wording and proactive review particularly important.
At DSP, our job is not to tell clients to avoid innovation, but rather to help make sure that as their businesses change, their insurance programs keep up.
If your company is expanding its use of AI, now is a good time to understand where it is being used, what your policies say and whether any new coverage gaps are developing. Your DSP advisor can help you find out. Reach out before your next renewal.
Sources
[1] Insurance Business, "The AI clause that may already be on your contractor client's policy," Mark Rosanes, August 25, 2026, reporting on an analysis of public SERFF and Florida I-File insurance filings through July 31, 2026.
[2] Insurance Journal: "Insurer Interest in AI Coverage Exclusions Growing as Risk Becomes Omnipresent," Don Jergler, August 17, 2026. Includes Verisk's description of ISO generative AI endorsements CG 40 47, CG 40 48 and CG 35 08.
[3] Industry broker alert on the ISO generative AI exclusion in commercial general liability policies and its implications for construction companies, 2026.