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May 20, 2026 · Brief

The exclusions founders miss in AI liability language

A founder-level overview of wording that can quietly narrow coverage for AI product claims.

Benno Embser4 min read

AI liability language is often buried across cyber, technology E&O, media, and miscellaneous professional liability forms. The problem is not only whether a policy mentions AI, but how exclusions interact when a customer alleges model error, bad advice, or data misuse.

Watch broad output exclusions

Some forms exclude losses arising from generated output without distinguishing between fully automated decisions, assisted workflows, and human-reviewed recommendations. That distinction matters for underwriting and claims.

Check professional services definitions

If your product guides legal, financial, health, hiring, or operational decisions, confirm whether the services definition actually includes your product workflow and customer promise.

Do not ignore contract carveouts

Enterprise contracts can create indemnity obligations that exceed the base policy. Coverage should be checked against the clauses your sales team is actually signing.