As more businesses use AI across the value chain, they become more vulnerable to liabilities from system failure, bad advice, or bias profiling. This has led to the creation of AI liability insurance products, which are both a risk and an opportunity for insurers. In May 2026, insurance startup Corgi launched a product that aims to cover businesses for these negative outcomes.
GlobalData’s 2025 SME Survey found that SMEs wanted to be covered for a range of potential threats—all the risks we surveyed were cited by over a third of respondents. Legal fees around lawsuits from AI-related decisions were the most popular feature, with 54.1% of SMEs selecting it. The level of risk is so high for insurers, as there are so many different areas of loss to cover. As we are still at an early stage of AI adoption, there is little underwriting and claims data for insurers to use in creating and pricing policies.
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Across many of these categories, a lack of cover could prove expensive for insurers. Regulatory fines can be extremely large; reputational damage is hard to define but could be vast from a serious AI error. Lawsuits could emerge around erroneous advice being given by bots or data biases, for example, and could be especially expensive. Meanwhile, business interruption from system failure could lead to loss of business for an extended period of time.
Insurtech Corgi is the latest to launch an AI liability product, which it claims will cover businesses for systems malfunction, biased outputs, and financial and legal exposure. This touches on several of our surveyed options, but not all (with reputational damage and business interruption not specifically cited). This highlights how many different risks insurers need to cover in this emerging area.
It is undoubtedly a significant opportunity for insurers. Business use of AI will only continue to grow, as AI continues to dominate investment and discussion across industries. Yet the speed of its growth means businesses will not be prepared for all the potential liabilities. Insurers will need to start by offering tailored policies, allowing businesses to select what they want to be covered for, while not exposing themselves to every possible liability from AI usage. Providers not offering AI liability policies will risk missing out on a market with very high growth potential in the coming years.
