Insurance Agency Warns Firms to Check Coverage as AI Exclusions Appear
Bruce Gendelman Insurance is urging businesses to review their insurance programs as insurers begin to address artificial intelligence through new exclusions, policy language and specialized AI coverage. The New York agency says policies have not necessarily kept pace with how quickly companies are adopting AI.
- Bruce Gendelman Insurance says insurers are adding AI exclusions, policy language and specialized AI coverage.
- AI incidents could implicate General Liability, E&O, Cyber and Management Liability policies, according to the agency.
- The agency suggests four questions about where and how a company uses AI, including what human review takes place.
- It has launched an AI Insurance Exposure Review to compare AI usage with existing coverage.
- CEO Joe Gendelman compares AI to the early evolution of cyber insurance, but says it is happening much faster.
Insurers start to respond to AI risk
According to the agency's announcement, AI has quickly become part of everyday business operations. Companies use it for customer communications, marketing, contracts, research, financial analysis, professional services and decision-making.
The insurance market is now reacting. The agency says new AI-specific exclusions are becoming available for commercial liability policies, and individual insurers have introduced their own AI-related exclusions. Specialized AI liability products are also entering the market. At the same time, some insurers are affirmatively extending coverage for certain AI exposures, which the agency describes as a rapidly evolving insurance landscape.
Bruce Gendelman Insurance says an AI-related incident could potentially implicate several policies depending on the circumstances. It names General Liability, Errors & Omissions, Cyber and Management Liability.
Four questions for businesses
The agency recommends that businesses start by asking four questions:
- Where is our company currently using AI?
- Are we using AI for customer communications, contracts, financial information or professional advice?
- Are we relying on AI-generated information to make decisions or provide services?
- What human review occurs before AI-generated information is used?
Joe Gendelman, President and CEO of the agency, said many business owners focus on what AI can do for their company, not on whether insurance will respond if something goes wrong. "That's the conversation businesses need to start having now," he said.
He also cautioned against assuming that more insurance is the answer. "We're not suggesting every company needs to go out and purchase another insurance policy," Gendelman said. "First, understand your AI exposure. Then look carefully at your existing policies and determine what is covered, what is excluded and where there may be uncertainty."
An AI Insurance Exposure Review and a cyber comparison
The agency has introduced an AI Insurance Exposure Review. According to the company, it is meant to help businesses evaluate their AI usage alongside existing coverage and decide whether coverage gaps or limitations deserve attention. Businesses can inquire at Gendelman.com or by phone at 800-845-4145.
Gendelman compared the situation to the early days of cyber insurance. "Twenty years ago, cyber wasn't viewed as a separate insurance exposure by most businesses," he said. "Today it's a fundamental part of many insurance programs. AI could be at the beginning of a similar evolution, but it's happening much faster."
The agency describes itself as a privately owned, family-run independent insurance agency serving commercial and personal clients in the United States and overseas.
What it means for businesses
The announcement is a promotional message from an insurance agency, but its core point is practical: companies that use AI should check how their current policies treat it. Because some insurers are adding exclusions while others extend coverage, the outcome may differ from one policy to the next. Gendelman's own advice is brief: "Don't wait for an AI-related claim to find out whether you're covered."
