CFC launches affirmative AI cover for intellectual property risks

CFC has introduced affirmative artificial intelligence (AI) coverage within its intellectual property insurance policy.

The specialist insurer said the new wording is designed to remove ambiguity surrounding AI-related risks without altering the underlying scope of the policy.

The launch comes as businesses increasingly use AI to create, develop and commercialise intellectual property, while legal and regulatory frameworks governing AI continue to evolve across different jurisdictions.

Questions around training data, ownership rights, copyright infringement, liability and AI-generated content have created growing uncertainty for businesses adopting the technology.

“AI is creating enormous opportunities for businesses, but it is also introducing new and increasingly complex intellectual property risks,” said Maddi Brown, IP practice leader at CFC. “Questions can arise at every stage of the AI lifecycle, from the data used to train a model and the technology itself to the outputs it produces.

“The legal and regulatory position remains uncertain and varies significantly across jurisdictions, making it difficult for businesses to assess their exposure. As investment and innovation in AI continue, we also expect businesses to place greater emphasis on protecting and enforcing the intellectual property rights associated with these technologies.

“Our affirmative AI wording gives policyholders greater clarity. It confirms that where an AI-related intellectual property claim would otherwise be covered, the involvement of AI alone does not create uncertainty around how the policy responds.”

Portfolio expansion

The insurer said the enhancement forms part of a wider programme to introduce affirmative AI wording across its insurance portfolio.

CFC said its updated wording confirms that claims involving AI can remain covered where they otherwise meet the policy’s coverage requirements, helping clients better understand how protection applies.

”While no one can predict exactly how the relationship between AI and intellectual property will develop, we can give businesses confidence that they have specialist protection in place as they adopt the latest AI tools,” Brown added.