CFC makes key wording changes to launch affirmative AI cover

CFC has announced it will implement a series of policy wording updates throughout its portfolio, aimed at adding affirmative artificial intelligence (AI) coverage to its products.

The cyber specialist MGA said that the updates will introduce “clear, explicit AI-related language across seven key policies, ensuring customers have certainty around how AI-related exposures are treated”.

Nick Line, chief underwriting officer at CFC, explained that as AI is now “embedded in day-to-day business operations across all industries” it naturally “interacts with the same risks that insurers have always covered”.

“Our focus has been on giving clients and brokers clarity within our policies. Rather than relying on implied or silent coverage, we see value in being explicit about how AI is treated,” he added.

Updates will be made to CFC’s core offerings including technology errors and omissions, professional liability, eHealth, intellectual property, management liability, media and cyber proactive response cover.

The firm said that the changes will address AI related risks such as model hallucinations, AI-generated content and model drift, and that by adding such clauses it can build a more “consistent and comprehensive foundation for businesses navigating the next phase of technological change”.

Line added: “At its core, AI acts as an accelerant of existing risk, reinforcing the need to embed AI considerations across our existing products.

“While much of the market discussion around AI has centred on cyber insurance, we have taken a broader approach that integrates coverage across multiple products, reflecting the true breadth of its impact on business risk.

“We’ve taken the time to understand how AI risk operates in practice and reflected that explicitly in our coverage. Ultimately, this is about keeping insurance aligned with the real world. AI is reshaping how businesses operate and our role is to ensure insurance products evolve in step.”