CFC has added explicit AI coverage to seven commercial insurance products, eliminating ambiguity around how policies respond to AI-related risks. The June 25, 2026 announcement addresses a growing concern among brokers and clients: coverage certainty as businesses embed AI tools into daily operations.
The update inserts affirmative AI language into technology errors and omissions, professional liability, eHealth, intellectual property, management liability, media and cyber proactive response policies. CFC said the wording is designed to clarify coverage treatment, rather than leaving it to silent or implied protection.
Industry moves to address 'silent AI'
Insurers have been confronting what the market calls "silent AI" exposure - policies that neither expressly cover nor exclude AI-related risks. Carriers have introduced AI endorsements and revised wording across cyber, professional liability, and management liability lines to reduce claims uncertainty. For brokers, the task has shifted to assessing whether existing programmes need additional endorsements or clarified coverage.
Nick Line, chief underwriting officer at CFC, said AI has become part of day-to-day business activity and increasingly interacts with risks that insurers have traditionally covered. "Our focus has been on giving clients and brokers clarity within our policies," he said. "Rather than relying on implied or silent coverage, we see value in being explicit about how AI is treated."
Policy wording comes under greater scrutiny
The programme includes language that addresses model hallucinations, AI-generated content and model drift - exposures that have drawn attention as companies integrate AI into business processes. The broader discussion around AI for Insurance has focused on policy wording and coverage certainty, with industry participants reporting that insurers are reassessing AI-related exposure. Much of the immediate focus remains on coverage definitions and contract language, not pricing.
Line noted that while market discussion has centred on cyber insurance, AI affects a wider range of commercial risks. "We have taken a broader approach that integrates coverage across multiple products, reflecting the true breadth of its impact on business risk," he said.
Market approaches continue to diverge
Not all insurers have taken the same path. Some carriers have explored AI-related exclusions because of concerns over accumulation risk and uncertain future liabilities. The split creates challenges for brokers, who must compare policy wordings carefully as insurers adopt different positions on AI exposures.
The development points to a wider sector challenge. As regulation, litigation and business adoption evolve, insurers are still assessing whether existing policy frameworks adequately address AI-related liabilities. Coverage certainty has become a growing focus for brokers, underwriters and risk managers.
Why this matters for insurance professionals
Affirmative AI wording reduces the guesswork during placement discussions and claims disputes. For brokers, the ability to point to explicit coverage - or its absence - will shape client conversations, especially as insureds use AI across multiple business functions. The market's divergence on exclusions versus affirmative coverage means word-by-word policy comparisons are no longer optional; they are a critical part of the broker's role in securing coverage certainty.
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