Verisk's new generative AI exclusion forms took effect January 1, 2026, signaling a market-wide shift in how E&O carriers treat AI-assisted design work. Berkley, Hamilton, and Philadelphia have already excluded AI from certain professional liability products, leaving design firms exposed at renewal.
-- A wave of artificial intelligence exclusions is moving through the professional liability insurance market, fundamentally changing how errors and omissions policies respond to AI-assisted design work. Risk Specialty Group, a Houston-based insurance and risk management firm serving architects, engineers, and consultants, has issued new guidance for design firms preparing for 2026 and 2027 policy renewals.
The shift began in earnest on January 1, 2026, when Verisk released two endorsement forms (CG 40 47 and CG 40 48) providing carriers with standardized language to exclude losses arising from generative AI. While the forms primarily apply to commercial general liability, industry observers note the language is being adapted across professional liability product lines.
Berkley Insurance Company has gone further, introducing what the market now calls an “absolute” artificial intelligence exclusion. The endorsement applies to directors and officers, errors and omissions, and fiduciary liability products and specifically names ChatGPT, Bard, Midjourney, and DALL-E. Hamilton Insurance Group followed with its own generative AI exclusion. Philadelphia Insurance and Hamilton Select have moved most aggressively, excluding AI-related claims from E&O coverage entirely.
AIG, Great American, and W.R. Berkley have filed for regulatory approval to introduce comparable exclusions, according to industry trade publications.
For the typical architecture or engineering firm holding a policy written before 2026, AI-assisted design work generally remains covered. Most in-force E&O policies do not yet contain a specific AI exclusion, meaning a claim involving AI-assisted output is treated as a standard professional negligence matter regardless of the tool involved.
That answer changes at renewal. Travis Landers, ARM, President and Founder of Risk Specialty Group, has reviewed dozens of design firm renewals over the past year. According to his analysis, only a handful so far carry absolute AI exclusions, but the rate of adoption is accelerating with each renewal cycle. Reading the actual policy language now matters more than reading carrier marketing materials.
The exposure is meaningful. Stanford Law School research has documented hallucination rates between 58% and 88% on general-purpose AI tools, and 20% to 33% on specialized “legal-grade” systems. For a design firm, a hallucinated beam specification or a nonexistent building code citation is not an abstract risk. It is a claim waiting to happen.
Risk Specialty Group recommends a four-step policy audit for every design firm preparing for renewal. The audit covers the declarations page for endorsement schedules, the policy body for any reference to “artificial,” the definitions section for narrowed language around professional services, and the retroactive date that governs claims-made coverage for past AI-assisted work.
Firms that find an AI exclusion on a current or proposed policy still have options. Carriers have shown willingness to negotiate carve-backs for supervised AI use, particularly when a firm can document an internal AI governance program covering tool approval, verification steps, client disclosure, and licensed professional sign-off. Independent brokers with access to multiple markets can also place coverage that direct writers cannot, since AI exclusion adoption varies meaningfully among “A” rated carriers.
The complete guide to E&O coverage for AI-assisted design work, including the four-step audit and recommended contract language, is available from Risk Specialty Group's professional liability insurance team.
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