AI is transforming the way businesses operate—but is your insurance keeping pace?
From drafting emails and analyzing data to automating customer service and improving operational efficiency, artificial intelligence (AI) has quickly become a valuable business tool. Whether your employees are using Microsoft Copilot, ChatGPT, Gemini, or other AI platforms, chances are AI is already playing a role in your organization.
While these technologies offer tremendous opportunities, they also introduce new risks that many business owners have not considered. As AI adoption accelerates, now is the time to review your insurance program to ensure your business is protected.
AI Is Creating New Business Risks
Most business owners think of AI as a productivity tool—and it is. However, it can also create new exposures that traditional insurance policies may not fully address.
Some of the most common AI-related risks include:
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Employees inadvertently sharing confidential or proprietary information with AI platforms.
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AI-generated content that contains errors, misleading information, or copyright issues.
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Deepfake technology used to impersonate executives and authorize fraudulent wire transfers.
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AI-powered phishing attacks that are increasingly difficult for employees to recognize.
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Decisions made with AI that could result in employment-related claims or allegations of discrimination.
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Increased cyber threats targeting businesses that rely heavily on digital systems.
As technology evolves, so do the tactics used by cybercriminals.
Does Your Current Insurance Cover AI-Related Claims?
Many business owners assume their existing insurance policies automatically cover these emerging risks. Unfortunately, that isn’t always the case.
Depending on your business, it may be time to review your:
Cyber Liability Insurance
Cyber insurance may help protect your business from data breaches, ransomware attacks, business interruption, and certain cyber-related expenses. However, not every policy addresses emerging AI-driven cyber risks in the same way.
Commercial Crime Insurance
Deepfake scams and sophisticated social engineering attacks have become increasingly common. Crime insurance may help protect your business from financial losses caused by fraudulent wire transfers or employee impersonation, but only if your policy includes the appropriate coverage.
Professional Liability (Errors & Omissions)
If your business provides professional advice or services, AI-generated recommendations or content could create liability if clients rely on inaccurate information.
Employment Practices Liability Insurance (EPLI)
Organizations using AI to assist with recruiting, hiring, performance evaluations, or workforce decisions should understand how these technologies may affect employment-related liability.
Directors & Officers (D&O) Liability
Business leaders are increasingly expected to oversee the responsible use of AI. As governance expectations continue to evolve, companies should evaluate whether their management liability coverage remains appropriate.
Risk Management Is Just as Important as Insurance
Insurance is only one part of protecting your business.
Business owners should also consider implementing AI governance policies that address:
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Approved AI tools employees may use.
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Rules regarding confidential or client information.
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Employee training on AI risks and cybersecurity.
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Review procedures for AI-generated content before publication.
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Approval requirements for financial transactions and wire transfers.
A thoughtful AI policy can reduce risk while allowing your team to benefit from the technology.
Now Is the Time for an Insurance Review
Artificial intelligence is evolving faster than most businesses can update their risk management practices. The insurance industry is also adapting, with new endorsements, underwriting questions, and coverage options emerging as AI becomes more integrated into everyday business operations.
If you haven’t reviewed your insurance coverage since implementing AI tools, now is an excellent time to do so.
At Princeton Harriman Insurance Solutions, we help business owners identify emerging risks and build insurance programs designed to protect what they’ve worked so hard to build.
Our team can review your current policies, identify potential coverage gaps, and recommend solutions that align with your company’s unique operations and goals.
Artificial intelligence is changing business. Make sure your insurance evolves with it.
Contact Princeton Harriman Insurance Solutions today to schedule a comprehensive business insurance review and ensure your company is prepared for the risks of tomorrow.
Disclaimer:
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Princeton Harriman Insurance Solutions is licensed to conduct insurance business in the following states: CT, FL, IL, IN, MD, MI, NC, NJ, NY, OH, PA, SC, TX, and VA. Insurance products and services are only offered in those jurisdictions. This communication is not intended as a solicitation or offer of insurance in any state where we are not licensed.
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Please note that insurance coverage cannot be bound, amended, or canceled via email or other electronic communication. Any request or instruction regarding your insurance policy is not effective until confirmed in writing by a licensed agent. This email and its contents are for informational purposes only and do not constitute an agreement, contract, or offer of insurance coverage.
