Does shadow AI trigger insurance exclusions?

Last verified: March 24, 2026
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.

Carrier Endorsement Details

CG-40-47

Verisk — CG 40 47

Excludes bodily injury, property damage, and personal/advertising injury arising out of generative AI content, output, or interaction.

Key Provisions

Excludes BI and PD arising from AI-generated content or output
Excludes personal/advertising injury from AI use
Applies regardless of whether AI is owned, licensed, or embedded
Type: exclusion Policies: CGL
PC-51380

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

Absolute exclusion — no coverage for any AI-related claim
Applies to claims 'based upon, arising out of, or attributable to' AI
Covers owned, licensed, and third-party AI systems
No carve-back for incidental AI use
Type: exclusion Policies: D&O, E&O, Fiduciary

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Related Questions

  • 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.