CSO: “Several major insurance carriers have begun to back away from providing cybersecurity and other insurance to companies using AI to run internal processes, insiders say. While there’s no standard response to customer use of AI in the insurance market, many carriers are now quietly declining to write policies for claims related to AI-generated outputs in cybersecurity and errors and omissions (E&O) coverage, these observers say. Other insurance carriers are jacking up prices to cover AI-related claims, they say. Dozens of insurance carriers appear to be rethinking coverage for mistakes related to AI, says Connor Deeks, CEO of Codestrap, an AI development and consulting firm that works with insurance firms. Many insurance companies aren’t comfortable with covering AI outputs because they can’t track the reasoning path the AI took to come up with a result, he says. “That’s playing out downstream with insurance companies basically carving out coverage, whether that’s across cybersecurity or E&O,” he says. “All of these vibe-coded solutions and these AI systems that people have constructed have inherent risk baked into the cake now, and you can’t actually see the full process.” The insurance carrier concerns about AI workloads first surfaced in November 2025, when Financial Times reported that three major carriers, AIG, Great American, and W.R. Berkley, filed requests with US regulators to offer insurance policies that exclude liabilities tied to AI tools such as chatbots and agents. At the time, those requests appeared to be preemptive moves to be allowed to exclude AI mistakes sometime in the future. But now, many carriers seem to be moving forward with plans to exclude Deeks’ company has a vested interest in AI insurance coverage — Codestrap markets its AI coding platform as traceable and therefore insurable — but other industry insiders have also seen similar carrier decisions…”