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Here is a question worth asking before your next renewal: Does your general liability policy still cover damages caused by artificial intelligence? For many businesses, the answer is no, and most of them have no idea.

In early 2026, major carriers, including Chubb, Travelers, and Berkshire Hathaway, received state regulatory approval to add explicit AI exclusions to general liability, directors and officers, and errors and omissions policies. According to PYMNTS’ reporting, state regulators approved more than 80 percent of those requests. In several states, the exclusions began taking effect as early as January 2026.

This is not a footnote change. It is a structural shift in what standard commercial policies cover — and it is happening right now, mid-policy-cycle, with little fanfare directed at the business owners most affected.

What the AI Exclusions Actually Cover

The new exclusions are broad. They target bodily injury, property damage, and personal and advertising injury tied to generative AI outputs. That includes defamatory content produced by an AI tool, intellectual property infringement from AI-generated materials, and physical damages traceable to AI-driven errors or recommendations.

What does that look like in practice? Consider a marketing firm using an AI content tool that produces a defamatory statement about a competitor. Or a logistics company whose AI-powered routing system makes a recommendation that contributes to a vehicle accident. Or a professional services firm whose AI-assisted report contains a material error that causes financial harm to a client. Under the new exclusionary language, standard GL and E&O policies may not respond to any of those claims.

The Insurance Services Office, the private body that sets industry standards, introduced two new optional AI endorsements that carriers have been moving quickly to adopt. Some carriers, including Berkley, have implemented absolute AI exclusions across multiple lines simultaneously.

Why This Is Catching Most Businesses Off Guard

The problem is not that businesses are ignoring AI risk. It is that most assume existing policies cover it. AI tools have proliferated across operations, marketing, customer service, hiring, and financial analysis — often faster than legal or risk management teams can track. According to research cited by governance analytics firm Techne AI, 88 percent of organizations are now deploying AI in some form, yet fewer than 25 percent have board-level AI governance policies in place.

That gap between deployment and governance is exactly where insurers are drawing the line. Carriers are not saying AI is uninsurable. They are saying they do not yet know what it costs. Until actuarial models catch up, they are moving the risk off their books and onto yours.

The pattern mirrors what happened with cyber insurance a decade ago. A wave of attacks generated claims. Businesses argued their GL policies covered the losses because cyber was not explicitly excluded. Insurers responded by carving cyber out of standard coverage and building standalone products. That market matured into a $12 billion industry. The AI liability market is beginning the same process — just faster.

What to Do Before Your Next Renewal

The first step is a policy audit. Review your current GL, D&O, E&O, and professional liability policies for any new endorsements or exclusionary language related to artificial intelligence. If your policy renewed after October 2025, there is a meaningful chance this language was added without an explicit conversation.

Second, map where AI is actually being used in your business. Recruiting and screening tools, customer-facing chatbots, financial modeling software, and content generation platforms all carry potential liability. Bias in AI hiring tools alone can trigger Employment Practices Liability claims that your EPLI policy may or may not cover depending on how AI is addressed in the language.

Third, ask your broker specifically about standalone AI liability coverage. Specialized products now exist from carriers including Munich Re, with limits ranging from $2 million to $50 million. Premiums vary widely depending on industry, AI use intensity, and governance controls. Businesses that can document structured AI oversight and bias testing tend to achieve more favorable terms.

The team at Tooher-Ferraris works with businesses across industries to identify coverage gaps before they become claims. Start with a review of your commercial insurance program and ask specifically about AI-related exclusions in your current policies. You can also explore specialty programs designed for emerging and non-standard risks.

For more on how AI governance intersects with D&O and E&O exposure, the Risk and Insurance Management Society publishes current guidance at RIMS.org.

Ready to find out what your current policies actually cover in 2026? The team at Tooher-Ferraris has been helping businesses protect what they’ve built since 1932. Contact us today at https://toofer.com/contact-us/ to schedule a no-obligation consultation.

The logistics and transportation industry continues to operate under growing legal and regulatory pressure. Rising litigation costs, nuclear verdicts, and stricter compliance expectations have already reshaped the risk landscape for trucking companies, freight brokers, warehouse operators, and third-party logistics (3PL) providers.

Now, the Supreme Court’s Montgomery decision is creating new concerns around liability exposure and operational accountability.

While courts and legal experts continue to interpret the full impact of the ruling, logistics companies should take this opportunity to review their contracts, compliance procedures, and insurance programs to help reduce future exposure.

Businesses seeking transportation-focused risk guidance can explore solutions through Tooher-Ferraris Insurance Group.

Why the Montgomery Decision Matters

The Montgomery decision may influence how courts evaluate responsibility within transportation operations, particularly when multiple parties are involved in the movement of goods.

For logistics companies, this could affect areas such as:

• Negligent hiring claims
• Driver oversight responsibilities
• Independent contractor relationships
• Freight broker liability
• Vendor management practices
• Contractual risk transfer agreements

Plaintiffs’ attorneys may increasingly attempt to hold logistics organizations accountable for the actions of subcontractors, owner-operators, or third-party vendors, even when those parties are not direct employees.

Independent Contractor Relationships Under Scrutiny

Many transportation companies rely heavily on owner-operators and independent contractors. The Montgomery decision reinforces the importance of carefully structuring and documenting those relationships.

Companies should review:

• Independent contractor agreements
• Dispatch procedures
• Safety enforcement practices
• Branding requirements
• Operational control standards
• Compliance documentation

Transportation providers should also maintain strong compliance with regulations established by the Federal Motor Carrier Safety Administration (FMCSA), including driver qualification, hours-of-service requirements, and safety monitoring.

If operational control over contractors becomes too extensive, companies could face arguments that those contractors functioned more like employees, potentially increasing liability exposure.

Contracts and Documentation Are Essential

Strong contracts remain one of the best defenses against transportation-related litigation. Logistics companies should regularly review agreements with carriers, brokers, staffing firms, vendors, and shippers.

Critical areas include:

• Indemnification language
• Additional insured requirements
• Auto and umbrella liability standards
• Cargo insurance obligations
• Waivers of subrogation
• Claims reporting requirements

Documentation is equally important. In the event of a claim, transportation companies may need to demonstrate:

• Driver qualification reviews
• Safety training records
• Vehicle maintenance logs
• Drug and alcohol testing compliance
• Incident response procedures
• FMCSA compliance records

Additional transportation safety resources can be found through the U.S. Department of Transportation.

Insurance Implications for Logistics Companies

The transportation insurance market has already experienced significant challenges due to increasing claim severity and rising jury awards. Decisions that potentially expand liability concerns could place additional pressure on:

• Commercial auto insurance pricing
• Excess liability availability
• Umbrella coverage limits
• Underwriting scrutiny

Insurance carriers are likely to continue focusing heavily on safety controls, operational procedures, and claims history during renewals.

Companies with transportation exposures may benefit from reviewing their existing commercial insurance and fleet risk strategies with specialists who understand the industry’s evolving legal environment.

Final Thoughts

The Supreme Court’s Montgomery decision serves as another reminder that logistics companies must remain proactive when it comes to risk management, compliance, and operational oversight.

Organizations that strengthen contracts, improve documentation, enhance safety procedures, and regularly review insurance programs will likely be in a stronger position to manage future legal and financial risks.

At Tooher-Ferraris Insurance Group, we work with transportation and logistics companies to help identify emerging exposures, strengthen insurance strategies, and support long-term operational resilience.