AI insurance exclusions: Marsh CEO warns, read your renewal

Your AI agent sends a wrong refund, books the wrong order, or leaks a customer file. Who pays? More and more, the answer depends on one paragraph in your insurance renewal. On October 16, Marsh CEO John Doyle said broad AI insurance exclusions could create "real confusion and uncertainty" and called for a more careful way to price AI risk. When one of the biggest insurance brokers says the wording is a problem, small businesses should read their own policies.

What actually happened

Per Bloomberg's report, carried by Claims Journal, Doyle spoke on Marsh's post-earnings call. Key points:

• The warning. Doyle said Marsh is not attacking insurers. He wants a discussion of how AI changes exposures, given "very limited claim activity to date."
• The framework. Marsh Risk CEO Nick Studer put AI risk in two groups: AI as a new path to an old peril (where he said exclusions create gaps and disputes), and AI that shows flaws in current products. He was not sure a third, AI-only category exists.
• The agent problem. The report notes that AI agents can act on their own with the access you give them. That makes it unclear whether losses such as business disruption are covered.

The market is split. Business Insurance reported on October 7 that ISO filed optional generative-AI exclusions for general liability policies last year. Zurich U.S. CEO Alex Wells said mostly smaller carriers that auto-adopt ISO forms use them; Zurich does not use blanket AI exclusions. Coalition said it sees many AI exclusions filed but not widely adopted, and it sells affirmative AI coverage.

Why it matters for your business

Big carriers may resist blanket exclusions. Small businesses often buy from the smaller carriers that adopt ISO forms as written. That means the exclusion can land in your packet at renewal with no phone call.

We run agents in our own operations, so here is what we check:

• Read the endorsements list. Search your general liability, E&O, and cyber policies for "artificial intelligence" and "generative." Ask your broker what each one removes.
• Map agent actions to policies. An agent that issues refunds is a money risk. An agent that writes product copy is an advertising-injury risk. Know which policy each one falls under.
• Keep the logs. If you file a claim, you must show what the agent did and who approved it. No audit trail, no story.
• Put a human on irreversible steps. Payments, deletions, and customer-facing sends need an approval gate. That reduces both the loss and the argument about coverage.

Sources: Claims Journal / Bloomberg: Broad AI Exclusions Could Create Uncertainty, Marsh CEO Says, Business Insurance: AI exclusions struggle to gain traction.