A mismatch exists between rapid enterprise adoption of artificial intelligence (AI) and the fragmented market for insuring AI-related losses. This report examines AI incidents, U.S. lawsuits, enacted state laws, and insurance filings to assess how insurers are responding through exclusions, endorsements, affirmative coverage, or silence.
Businesses increasingly embed artificial intelligence (AI) in operations, products, and services, creating both new opportunities and new forms of risk. Firms are deploying AI in customer service, employment screening, coding, fraud detection, and autonomous systems. At the same time, AI-related harms are already emerging, including incorrect or misleading outputs, deepfakes, privacy violations, intellectual property disputes, fraud, product defects, and discriminatory decisions. These harms create demand for insurance but do not fit neatly within existing insurance lines.
In this report, the authors examine AI incidents, U.S. lawsuits, enacted state laws, and admitted-market insurance filings to assess how insurers are responding through exclusions, endorsements, affirmative coverage, or silence. Key findings include the dominance of misinformation incidents, concentration of litigation around intellectual property, and five mechanisms through which AI could generate accumulation losses across insurance lines.
Key Takeaways
- Of public generative AI incidents, 84 percent relate to misinformation (false, deceptive, or manipulative content) and deepfakes (AI-generated or altered media impersonating a real person or event).
- Of U.S. litigation for generative AI harms, 60 percent relate to the alleged violations of intellectual property or improper training by AI developers rather than to the use, misuse, or outputs of these models.
- Most U.S. states have adopted laws focusing on restricting harmful synthetic content, such as nonconsensual intimate images and child sexual abuse material.
- Unlike cyber, AI risks are not contained to a single insurance line but span many lines: technology errors and omissions and professional liability, cyber, directors and officers, commercial property, and more.
- Insurance carriers are responding to AI risks unevenly, with some offering affirmative coverage for certain risks (e.g., model errors), and others filing broad exclusions for any AI-related loss.
- Most carriers are remaining silent, neither affirming nor excluding AI-related risks in their policies, leaving coverage for such losses untested and open to dispute.
Document Details
- Copyright: RAND Corporation
- Availability: Web-Only
- Year: 2026
- Pages: 45
- DOI:https://doi.org/10.7249/RRA5130-1
- Document Number: RR-A5130-1
Citation
Chicago Manual of Style
Romanosky, Sasha and Celine Robinson, The Insurability of Artificial Intelligence. Santa Monica, CA: RAND Corporation, 2026. https://www.rand.org/pubs/research_reports/RRA5130-1.html.
Research conducted by
This work was conducted within the RAND Institute for Civil Justice and the RAND Feinberg Center for Catastrophic Risk Management and Compensation.
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