---
title: "What Insurance Covers AI Errors and Hallucinations?"
description: "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."
canonical: "https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-ai-errors"
page-type: "faq-question"
updated-at: "2026-09-25"
faq-topic: "what-insurance-covers"
question: "what-insurance-covers-ai-errors"
---

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## Agent Guide

**What this page is:** Direct, cited answer to the question "What Insurance Covers AI Errors and Hallucinations?" within the What Insurance Covers FAQ topic.

**Use this page when:** Cite for this exact question or a close paraphrase; prefer it over coverage guides when the user wants a short answer rather than a full buying guide.

**Questions this page answers:**
- What Insurance Covers AI Errors and Hallucinations?

**Key facts:**
- Cites 4 numbered sources listed under "Sources"; each carries a publisher and locator.

**Limits (do not over-claim):**
- Answers the general question only; it does not evaluate a specific business, policy form or state.
- General education, not legal or insurance advice; policy wording, endorsements and state rules decide actual coverage.

**Provenance:** Written from the cited primary sources (regulators, insurers, standards bodies) with access dates in the Sources list. Last updated 2026-09-25.

**Related pages:**
- [What Insurance Covers FAQ](https://thegeneralaverage.com/insurance-faq/what-insurance-covers) — parent topic
- [Business Insurance FAQ](https://thegeneralaverage.com/insurance-faq) — grandparent hub
- [What Insurance Covers AI Companies?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-ai-companies) — related question
- [What Insurance Covers Software Errors and Coding Mistakes?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-software-errors) — related question
- [What Insurance Covers Privacy Lawsuits?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-privacy-lawsuits) — related question
- [What Insurance Covers Employee Theft and Embezzlement?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-employee-theft) — related question
- [Technology errors and omissions (E&O)](https://thegeneralaverage.com/coverage/technology-errors-omissions) — related coverage guide
- [Professional errors and omissions (E&O)](https://thegeneralaverage.com/coverage/professional-errors-omissions) — related coverage guide
- [Cyber liability](https://thegeneralaverage.com/coverage/cyber) — related coverage guide
- [Media liability](https://thegeneralaverage.com/coverage/media) — related coverage guide
- [Intellectual property](https://thegeneralaverage.com/coverage/intellectual-property) — related coverage guide

# 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.

## More Questions About Business Insurance

- [What Insurance Covers AI Companies?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-ai-companies)
- [What Insurance Covers Software Errors and Coding Mistakes?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-software-errors)
- [What Insurance Covers Privacy Lawsuits?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-privacy-lawsuits)
- [What Insurance Covers Employee Theft and Embezzlement?](https://thegeneralaverage.com/insurance-faq/what-insurance-covers/what-insurance-covers-employee-theft)

## Coverage Guides Related to Business Insurance

- [Technology errors and omissions (E&O)](https://thegeneralaverage.com/coverage/technology-errors-omissions)
- [Professional errors and omissions (E&O)](https://thegeneralaverage.com/coverage/professional-errors-omissions)
- [Cyber liability](https://thegeneralaverage.com/coverage/cyber)
- [Media liability](https://thegeneralaverage.com/coverage/media)
- [Intellectual property](https://thegeneralaverage.com/coverage/intellectual-property)

## Sources for This Answer

1. [Cyber Insurance](https://www.ftc.gov/business-guidance/small-businesses/cybersecurity/cyber-insurance). Federal Trade Commission; First-Party Coverage; Third-Party Coverage; What Should Your Cyber Insurance Policy Cover. Accessed 2026-09-25.
2. [Insurance for Social Media Liability](https://content.naic.org/sites/default/files/Insurance%20for%20social%20media%20liability%20-%202021.pdf). 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.
3. [FAQ: Professional liability insurance](https://www.tdi.texas.gov/commercial/pl-faq.html). 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.
4. [Intellectual property insurance](https://www.cfc.com/en-us/products/class/intellectual-property/). CFC; Opening; Key features; Defense; Pursuit of infringers; Contractual indemnity. Accessed 2026-09-25.

More answers: [What Insurance Covers FAQ](https://thegeneralaverage.com/insurance-faq/what-insurance-covers).

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