Insurers now have a standard form to cut AI mistakes out of your liability policy
A standardized ISO endorsement lets carriers strip generative-AI-related claims out of commercial general liability policies, and adoption is accelerating in mid-2026. It can apply to AI your subcontractor used, not just yours.
A standard insurance industry form now lets carriers write generative AI completely out of a commercial general liability policy — and as of this week, more carriers are using it. If your estimator ran a takeoff through an AI tool, your scheduler used an AI assistant to sequence a phase, or a subcontractor's software auto-drafted a spec section, a claim tracing back to that output may not be covered anymore.
What actually changed
Verisk's ISO — the organization that writes the standard policy language most U.S. commercial insurers build on — released three endorsement forms effective January 1, 2026: CG 40 47, CG 40 48, and CG 35 08. CG 40 47 is the broad version, excluding bodily injury, property damage, and personal or advertising injury "arising out of, or attributable to" generative artificial intelligence, across both major coverage parts of a standard CGL policy. CG 40 48 narrows that to advertising-injury claims only, and CG 35 08 applies the same exclusion to products-and-completed-operations coverage — the part of a GL policy that matters most once a project is finished and a defect shows up later.
ISO defines generative AI in the forms as "a machine-based learning system or model that is trained on data with the ability to create content or responses, including but not limited to text, images, audio, video or code." That's broad enough to cover an AI-assisted structural calc, an AI-summarized spec section, or an AI-sequenced schedule — not just a chatbot.
The forms have existed since January, but adoption is the news this week: industry coverage now describes carrier interest in these exclusions as "growing" through the middle of 2026, with major carriers filing to use ISO's language or their own proprietary version. A separate class of endorsements is moving through design-professional E&O policies too, meaning architecture and engineering firms are seeing AI exclusions show up on both their general liability and their professional liability renewals.
Does this reach your subcontractors' AI tools too?
Yes, and this is the part that should worry a GC more than a sub. Legal analysis of the exclusion language points out it can apply whether generative AI was used directly by the named insured or indirectly through a vendor, consultant, or project system. In practice: if your MEP sub's estimating software auto-generated a quantity takeoff with an AI feature, and that number was wrong, the GC's own GL carrier could point to the same exclusion — even though the GC never touched the tool.
A realistic claim scenario
A flawed AI-generated structural calculation, a hallucinated building specification, or an AI-sequenced schedule that missed a dependency could each lead to a design defect, a delay claim, or an accident on site. The exclusion doesn't require that nobody checked the output — legal commentary on the endorsement notes that even when project personnel reviewed and signed off on AI-assisted work, an insurer can still argue the loss "arises out of" generative AI and deny the claim on that basis alone.
What to check before your next renewal
| Step | Why it matters |
|---|---|
| Pull your current GL and E&O declarations pages | Look specifically for "Generative Artificial Intelligence Exclusion" or endorsement numbers CG 40 47 / CG 40 48 / CG 35 08 |
| Ask your broker if it's already attached | Adoption varies by carrier — some added it at your last renewal without a conversation |
| List every AI tool touching a project | Estimating software, scheduling assistants, spec-writing tools, and any sub's AI-enabled platform all count |
| Ask what your contract says about sub AI use | If a sub's AI output isn't disclosed to you, you can't evaluate your own exposure to it |
| Ask what it would take to buy the coverage back | If the exclusion is attached, ask your broker directly whether any carrier will quote a narrower buy-back for your specific AI use cases |
An A&E liability insurer survey cited in trade press this month found most carriers serving architecture and engineering firms are still planning rate increases for 2026, with AI-related risk named as one of the drivers — on top of, not separate from, this coverage question.
The takeaway
This isn't a hypothetical AI-safety story. It's a renewal conversation that's already happening at carriers this year, and most contractors haven't had it with their broker yet. Before your next GL or E&O renewal, get a straight answer on whether an AI exclusion is already attached — and whether it reaches AI your subs are running, not just your own. It's the same disclosure gap we flagged when AI-scored layoffs at Meta drew a discrimination lawsuit: if you don't know where AI touched a decision, you can't defend it — or insure it.
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- Does my general liability policy already exclude AI-related claims?
- Not automatically. Since January 1, 2026, ISO/Verisk has offered carriers a standard endorsement — CG 40 47 — that lets them add a generative-AI exclusion to a policy, and industry coverage of the trend shows adoption accelerating through the middle of 2026. Check your renewal declarations page for a 'Generative Artificial Intelligence Exclusion' endorsement.
- Does the exclusion apply if a subcontractor's software used AI, not mine?
- Legal analysis of the endorsement notes it can apply whether generative AI was used directly by the policyholder or indirectly through vendors, consultants, or project systems — so a sub's AI-generated takeoff or an estimating platform's AI feature can trigger the exclusion on a GC's claim too.
- What counts as 'generative AI' under the exclusion?
- The ISO form defines it broadly: a machine-based learning system or model trained on data that can create content or responses, including text, images, audio, video, or code. That covers AI-drafted specs, RFIs, schedules, and takeoffs, not just chatbots.
- Is this only a general liability issue, or does it hit professional liability too?
- Both. The CG 40 47 and CG 40 48 forms target commercial general liability, but design-professional E&O carriers have separately begun filing AI exclusions for architecture and engineering firms' professional liability policies.
- What should a GC or sub do before their next insurance renewal?
- Ask your broker directly whether CG 40 47, CG 40 48, or equivalent AI-exclusion language has been added to your renewal, and inventory every AI tool used on a project — yours and your subcontractors' — so the coverage gap gets evaluated before a claim tests it.