If you deploy AI anywhere in your business, there is a decent chance your commercial general liability policy no longer covers what that AI does. The change did not come with a phone call. It came as three endorsement forms, and it is being applied at renewal, one carrier at a time.
what happened
ISO, the body whose standard forms most US general liability policies are built on, introduced a set of generative-AI exclusion endorsements effective January 1, 2026. The three you will see are:
- i.cg 40 47: the broad one. it removes coverage for bodily injury, property damage, and personal and advertising injury arising out of generative ai.
- ii.cg 40 48: narrower. it carves out only personal and advertising injury, leaving bodily injury and property damage in place.
- iii.cg 35 08: applies to bodily injury and property damage in the products and completed operations hazard arising out of generative ai.
how they define generative ai
Broadly. The forms describe a machine-based system or model trained on data with the ability to create content or responses, including text, images, audio, video, or code. If your product touches a large language model, an image generator, or an agent, you are inside that definition.
why this matters even if you feel covered
Before these forms, AI exposure sat in most policies “silently.” The policy did not mention AI, so buyers assumed it was covered, and insurers priced without knowing their exposure. Analysts estimated that the vast majority of insurers' AI exposure was silent and unpriced. The new exclusions end the silence by ending the coverage. What used to be an ambiguous gray area is now a printed exclusion on the page.
“two companies with identical operations can have opposite coverage today, purely based on renewal timing.”
The rollout is uneven, which is the trap. Most in-force policies do not have the exclusion yet. Firms are picking it up at renewal, carrier by carrier. The dangerous assumption is “my policy has always covered this, so it still does.” Your last renewal may have changed that in a form you did not read.
what to check
Pull your current CGL policy and search the endorsement schedule for CG 40 47, CG 40 48, or CG 35 08. Ask your broker directly, in writing, whether any generative-AI exclusion has been added at your most recent renewal and whether one is planned at the next. Ask the same about your cyber and technology errors-and-omissions towers, where AI exclusions are also appearing.
where the coverage went
It did not disappear. It moved into a specialty line. The same exclusion wave that opened the gap created what one analyst called a multi-billion-dollar specialty insurance opportunity, and a set of specialist carriers now write these AI perils back affirmatively, by name. goodfault is one of them. Affirmative means the policy names the risk and agrees to cover it, rather than staying silent and leaving both sides to argue later.
The one-sentence version: the standard market is walking away from AI risk in printed forms, at your renewal, whether or not anyone told you. Find out which side of the line your policy is on before you have a claim that discovers it for you.
draft content for company-building. case studies and figures are illustrative and are not an offer of insurance or legal advice. cited events and frameworks are drawn from public 2026 sources.