Do AI exclusions cover shadow AI?
Answer
Most filed AI exclusions are written broadly enough to reach shadow AI — unsanctioned tools employees use without approval. Forms like Verisk CG 40 47 and Berkley PC 51380 apply to AI use generally and do not carve out authorization status. Whether a specific claim is excluded still depends on the exact wording and the facts, so review your endorsement language.
Yes. AI exclusion endorsements like Verisk CG 40 47 and Berkley PC 51380 use broad language covering any AI use, including unsanctioned shadow AI tools used by employees without authorization.
Sources checked
- Independent Agent — Verisk to roll out new GL exclusions for generative AI last checked 2026-05-31
- PropertyCasualty360 — General liability endorsements: generative AI last checked 2026-05-31
- W.R. Berkley (carrier site) last checked 2026-03-20
Scope
General business and insurance-risk analysis, not legal advice. Shadow AI can create legal exposure regardless of insurance; the exclusion question is separate from liability and concerns whether your coverage responds when the AI involved was unsanctioned. Broad AI exclusions generally do not distinguish between approved and shadow AI use — typical wording excludes claims 'arising out of' AI use without referencing authorization, so unsanctioned use is not obviously carved out. This applies to the Verisk and Berkley exclusion forms currently filed and adopted across several states; whether a specific claim is excluded still depends on the exact wording and facts. Confirm specifics with your broker.
Operational implication
An unmanaged AI tool used quietly by one employee can sit inside the same exclusion as sanctioned AI. Knowing where shadow AI exists is a prerequisite to understanding your coverage position.
Carrier Endorsement Details
Verisk — CG 40 47
Excludes bodily injury, property damage, and personal/advertising injury arising out of generative AI content, output, or interaction.
Key Provisions
W.R. Berkley — PC 51380
Absolute AI exclusion for D&O, E&O, and Fiduciary Liability — eliminates coverage for any claim "based upon, arising out of, or attributable to" AI use.
Key Provisions
Where this lands operationally
Gridex turns the compliance or coverage question into operated workflow controls: intake, review points, audit trails, and the places a person stays in the decision.
Map This Workflow With Gridex
Run a lightweight inventory of AI tools actually in use across teams — including informal ones — so shadow AI is visible before it becomes a coverage dispute.
Map This Workflow With Gridex →Related Questions
- Does shadow AI trigger insurance exclusions? Yes. AI exclusion endorsements like Verisk CG 40 47 and Berkley PC 51380 apply to all AI use — including unsanctioned shadow AI tools — meaning unauthorized employee AI use can void coverage.
- What is shadow AI? Shadow AI refers to artificial intelligence tools and services used by employees without IT department knowledge or organizational approval — including ChatGPT, AI writing assistants, and AI-powered browser extensions.
- What is Verisk CG 40 47? Verisk CG 40 47 is a CGL policy endorsement that excludes coverage for bodily injury, property damage, or personal/advertising injury arising out of AI systems.
- What does Berkley PC 51380 exclude? Berkley PC 51380 is an absolute AI exclusion for professional and management liability (D&O, E&O, Fiduciary) that eliminates coverage for any claim based upon, arising out of, or attributable to AI use.
- What AI documentation do insurers require? Insurers increasingly want documented AI governance programs, risk assessments, and usage inventories when underwriting technology-related policies. Hamilton's sublimit endorsement explicitly rewards governance documentation with higher coverage limits.