What Insurance Covers AI Errors and Hallucinations?
Professional or technology E&O may cover a client’s claim that an AI service caused financial loss; cyber and media policies address different allegations.
A customer may allege that an AI-enabled service gave inaccurate information or failed to perform as contracted. Texas DOI describes professional liability as covering service-related claims, but the policy must include the AI service and the specific harm alleged.
A published false statement may raise media or defamation issues, while exposed personal data may trigger cyber privacy coverage. Ask insurers to map those scenarios separately and identify exclusions for intentional conduct, known errors, or particular technologies.
Coverage Guides Related to Business Insurance
Sources for Business Insurance Answers
- Cyber Insurance. Federal Trade Commission; First-Party Coverage; Third-Party Coverage; What Should Your Cyber Insurance Policy Cover. Accessed 2026-09-25.
- Insurance for Social Media Liability. Journal of Insurance Regulation; authors Kevin T. Merriman, David M. Knapp, Meghan E. Ruesch and Nicole M. Weir; PDF pp.5–7, Coverage B personal and advertising injury; pp.20–21, standard offense wording; pp.35–37, exclusions for false advertising and intellectual property infringement. Accessed 2026-09-25.
- FAQ: Professional liability insurance. Texas Department of Insurance; What’s professional liability coverage?; What types of damages does it cover?; claims-made and occurrence policies. Accessed 2026-09-25.
- Intellectual property insurance. CFC; Opening; Key features; Defense; Pursuit of infringers; Contractual indemnity. Accessed 2026-09-25.