/>iIt was only a matter of time before new insurance coverages targeting the risks posed by artificial intelligence (AI) would hit the market. That time is now.
As the use of AI continues to proliferate, so too does our understanding of the risks presented by this broad and powerful technology. Some risks appear novel in form while others mirror traditional exposures that have long been viewed as insurable causes of loss. AI-related risks are made all the more novel because the meaning of AI itself is not only up for debate, but is constantly evolving as the technology matures. This mixture of old and new has the potential to create coverage gaps in even the most comprehensive insurance programs. Hence the development of specialized, AI-specific insurance solutions. In just the past few weeks, two new affirmative AI coverages have entered the market, signaling an acceleration in this trend.
Armilla’s Affirmative AI Coverage
On April 30, 2025, Armilla Insurance Services launched an AI liability insurance policy underwritten by certain underwriters at Lloyd’s, including Chaucer Group. This product is among the first to offer clear, affirmative coverage for AI-related risks, rather than relying on protections embedded in legacy policies.
While the introduction of this new, affirmative coverage should have no impact on the availability of coverage for AI-related losses that meet the terms of coverage under existing insurance policies such as cyber, directors and officers (D&O), or technology errors and omissions (E&O), this new product should address any unique exposures not contemplated under traditional coverages. Risks specifically contemplated under Armilla’s policy include AI hallucinations, deteriorating AI model performance, and mechanical failures or deviations from expected behavior. Armilla’s affirmative coverage may offer greater certainty for policyholders in an increasingly uncertain risk environment.
Google Cloud’s Entry into AI Risk Management
Earlier in 2025, Google took its own significant step into AI-specific risk mitigation by announcing a partnership with insurers Beazley, Chubb, and Munich Re. This collaboration introduces a tailored cyber insurance solution specifically designed to provide affirmative AI coverage that Google Cloud customers can purchase from the insurers Google has partnered with.
Customers that purchase the Google-specific insurance coverage receive a Google policy Endorsement that provides a suite of protections that can include business interruption coverage for failures in Google Cloud services, liability coverage for certain bodily injury or property damage, and protection for trade secret losses linked to malfunctioning AI tools. By embedding insurance directly into its cloud offerings, Google has taken a proactive role in delivering technological innovation, while also managing the associated risks.
Insuring the AI Future
The emergence of affirmative AI insurance products marks a key shift in the industry’s approach to managing AI-driven risks. With companies like Armilla leading the charge, insurers are beginning to address perceived coverage gaps that traditional policies may overlook. As momentum builds, 2025 is likely to bring a continued rollout of AI-specific coverages tailored to this evolving landscape. Collectively, these developments reflect a growing recognition across the industry of the distinct and complex nature of AI-related risk.
