Justin Levine

US insurers are starting to exclude AI from liability policies. I think that's the wrong move. Insurance Journal reported this week that ISO has filed three new endorsements that strip generative AI out of general liability cover. One carrier has gone further with an absolute AI exclusion across D&O and E&O. The justification is a 978% rise in AI-related lawsuits since 2021. I get the instinct. Something new and noisy shows up, so you carve it out until you understand it. But look at what's actually being excluded. AI is now the thing that formats the email, drafts the contract, answers the support ticket and, for some businesses, runs an entire workflow end to end. Within a couple of years it will be as separable from a business as the internet is today. We never wrote separate policies for companies that use computers versus ones that don't. We didn't exclude email. Cyber exists, but that's a distinct risk with its own drivers rather than a blanket carve out for "uses technology". The good news is that plenty of insurers are going the other way. Markel UK, CFC and Beazley all understand this space properly and want to write more of it, both the pure AI companies and the far larger group of businesses now using AI inside their operations. We place a lot of AI startups with them and we want to place more. That is what leaning in looks like. Here's the part that worries me more than exclusions. We keep seeing AI startups come to us holding a simple business policy that has them rated as software developers. Nobody did anything wrong. The business description options are just decades out of date, and those descriptions still drive the rating. So you get cover priced against a risk the company stopped being years ago, and a claim conversation nobody wants to have. Excluding AI is a decision. Rating it off a dropdown written in 2005 is just drift, and it's a bigger problem for insurers and businesses than any endorsement. If you're renewing this year, read the wording and check how your business is actually described on the schedule. Both matter. Curious whether anyone on the broker or underwriter side is seeing AI exclusions creep into UK wordings yet. https://lnkd.in/exV6uXeY

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A year ago something (nearly) unprecedented happened to the insurance industry. The California FAIR plan, the insurer of last resort had a massive surge of new business AND a massive surge of claims from the LA WildfireS...AT THE SAME TIME!! THE VAST VAST MAJORITY OF THE TIME, you will get one or the other (and its usually the claims part!) Not in this case. BOTH. Peter Crowe and I wrote about this in the latest issue of Carrier Management. The goal of the article was to take this extreme event and show how Elastic Staffing solves the human resource problem that emerges from this sort of crises where you need call center personel, adjusters, TPAs, AND underwriting support all at the same time. Yes, this will not be standard for most insurers, but most insurers due have demand shocks, most often from the claims side, but also from the underwriting, accounting and customer service side, where an Elastic Staffing model smooths out the volatility and reduces the risk and overhead to your organization.

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Hot take. The next insurtech failures won’t be about AI. They’ll be about underwriting drift. I’ve been in a few rooms lately where growth was being celebrated. But no one was challenging the modeling assumptions behind it. That worries me. Technology rarely breaks companies. Weak risk foundations do. Maybe I’m wrong. But I have a feeling 2026 won’t expose who had the best tech… It will expose who truly understood their exposure. Am I the only one seeing this?

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The Faulty Workmanship Exclusion: Why Underwriters ask about crimping, testing & commissioning. When you submit a plumber or mechanical contractor for a $20M Public Liability line, underwriters often fire back with specific operational questions: "Are workers certified in mechanical press-fit/crimping tool systems?" "What pressure-testing logs are kept before sign-off?" "Is there a formal commissioning checklist on site?" It isn't red tape, it's directly tied to how the Faulty Workmanship Exclusion operates under Australian broad form liability wordings. Standard Australian Policy Exclusion: "This Policy does not cover liability in respect of the cost of performing, completing, correcting, or improving any work undertaken by or on behalf of the Insured, or any expense incurred in replacing, repairing, or making good any defect in such work." How the Clause Triggers at Claim Time: ✧Rectifying Own Work (Excluded): The policy is not a workmanship warranty. If a plumber crimps a joint incorrectly, the policy will never pay to cut out the bad fitting, re-crimp, or fix the trade error itself. That remains an uninsurable cost of doing business. ✧Consequential Third-Party Property Damage (Covered): The policy triggers when that faulty joint fails and causes sudden, unforeseen physical damage to external property. Real-World Claim Scenario: ╰┈➤The Incident: A plumber installs a high-pressure press-fit copper system on an upper-floor commercial bathroom fit-out. ╰┈➤The Failure: An un-crimped joint slips off under mains pressure after hours because the jaw wasn't calibrated. ╰┈➤The Claim Breakdown: $180 to cut out the fitting and correctly crimp the pipe =   EXCLUDED (rectifying own work). $140,000 in water damage to the tenant’s timber flooring, acoustic ceilings, and server room below = COVERED (consequential third-party property damage). Why Underwriters Dig into Testing & Training: Because the resulting water damage is covered, a single undetected installation error can turn a $180 trade mistake into a six-figure property claim. When underwriters ask about tool maintenance, training , hydro-testing logs, and sign-off procedures, we are evaluating whether your client has quality control measures that prevent minor installation oversights from becoming massive liability events. ✦ The Broker Takeaway: Highlighting your client's formal commissioning procedures and tool calibration logs in your initial submission proves they manage their downside and speeds up your quote turnarounds.

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Why would a company with a $95 million D&O program end up suing its own insurers? That’s what Kaiser Permanente is doing right now. They settled a major False Claims Act matter, then turned to their D&O tower. The carriers pointed to a governmental funding endorsement and treated part of the payment as a “return of funds.” Kaiser says treble damages are different, and the exclusion should not swallow the settlement. When claims get this large, everything comes down to the wording. Exclusions and endorsements decide what actually gets paid. And once the primary carrier takes a position, the rest of the tower usually follows.   #assurtrak #dando #ManagementLiability #CorporateGovernance #RiskManagement John D. Farris Assurtrak Insurance Brokers, LLC

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California manufacturers: What happens if your biggest supplier goes offline? We recently analyzed a scenario for a client who sources critical components from a single partner. If that supplier has a fire or a major equipment failure, my client’s production stops: even if their own building is perfectly fine. Standard Business Interruption insurance usually only triggers if *your* property is damaged. But for SMEs in CA that are part of a tight supply chain, you need 'Contingent Business Interruption' (CBI). It protects your income when a supplier or key customer suffers a loss that halts your operations. In 2026’s volatile market, this is the difference between a temporary setback and a permanent closure. Check your policies for 'Contingent' triggers. It’s a game-changer. #CAManufacturing #SupplyChain #RiskManagement #SME #OsimeInsurance

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