Briefing: As AI evolves, affirmative cover is becoming ever more important

As the use of artificial intelligence (AI) continues to grow across different industry sectors, one of the key talking points at Insurance Times’ latest TechTalk Live event – held on 16 July 2025 in association with insurer Hiscox – was the importance of policy wordings being able to adapt as technology evolves.

The rise of AI is well documented. For example, a survey conducted by the Bank of England and FCA in November 2024 found that 75% of financial services firms are already using AI within their businesses, with a further 10% of corporate respondents planning to use it over the next three years.

With AI usage showing no signs of slowing down, experts attending this month’s TechTalk Live roundtable, held at London’s 14 Hills restaurant, discussed how the insurance industry was keeping up with this pace of change.

Dan Henry, account chief technology officer for insurance and investments at Microsoft, warned that AI is “constantly evolving”.

He added: “For that reason, policy wording needs to be able to evolve at that faster pace.”

Affirmative cover

This is where affirmative cover comes in.

In an insurance context, affirmative cover means a specific risk or peril has been explicitly stated and covered within a policy’s wordings. This is compared to silent coverage, where certain risks are not specifically mentioned, but may still be covered under a policy’s general terms.

As AI continues to grow in importance, Jason Cohen, executive director at Specialist Risk Group owned broker Hamilton Leigh, said that “to be explicit is good”.

He added: “Certainly on the broking side, we want to tell clients that you are covered and this is where it is written.

“Sometimes there is that whole conversation around ‘where is it, where does it say its covered?’ But I think it’s a very, very good thing for [risks] to be explicit in the [policy] wording.”

Elaine Lamb, client director at Partners&, noted that this was especially important for firms operating outside of the core technology sector, which may not have as strong an understanding of AI, its implementation and use cases.

She said: “[Some] clients don’t even know how to start with the AI. So, if [an insurer or broker states that] your annual policy will cover any work you’re doing around AI, then that’s really helpful.”

Coverage options

The question is, however, how does the insurance industry determine what it covers when it comes to AI and its use in myriad sectors?

At the moment, this is a developing area for the industry, given AI in its various iterations is still relatively new and there is not a huge claims history to work with.

Thomas Lowin, London regional manager at Hiscox – which provides affirmative cover for AI within its professional indemnity product for technology companies – said: “In terms of claims activity for something like a technology AI product, we have not seen claims yet.

“Whether it be from AI not doing what it said it was going to do, or some poisoning of that AI data model, we have not seen any claims arising from those yet.”

However, like with the cyber market, the more AI evolves, the more data the insurance industry will have to work with, which will help enhance the propositions and cover options already being offered.

It is becoming increasingly clear that AI and how it is used needs to be explicitly mentioned in policy terms, to ensure the needs of customers are met and that businesses can confidently innovate with new AI use cases as these tools evolve.

Jonny Garrett, associate director and divisional manager for media, tech and cyber at Brown and Brown, said: “When it becomes a claim, it’s going to go into a loss adjuster.

“It might go to a loss adjuster that reads the wording in a certain way that excludes AI risk, whereas if [there is] affirmative cover, they can’t really do that.”