What New EU Rules Mean for AI Liability
The EU AI Act, coming into effect in August 2025, imposes strict governance on “high-risk” AI models that could threaten public health, safety, or fundamental rights. Companies such as Google, OpenAI and Meta must comply with these stricter governance rules. Non-compliance could trigger fines of up to €35 million or 7% of global turnover, directly affecting tech giants and downstream users.
Implications for brokers and clients
- E&O and product liability policies should be reviewed for AI-specific exposure.
- Clients building or deploying regulated AI may need bespoke coverage.
- Policies must consider downstream liability even when firms are not the primary developers.
Source: Claims Journal, (July 21, 2025), AI Models With Systemic Risks Given Pointers on Complying With EU Rules
Cannabis Insurance Trends: Cyber, Crop, Compliance
By 2025, the legal cannabis market is projected to surpass $40 billion. In response the cannabis insurance market is evolving fast, with new products tackling cybersecurity breaches, crop failures, product liability and shifting compliance regimes. Policy gaps are emerging as federal reforms and climate volatility increase demand for more nuanced coverage. Premium hikes, regulatory fragmentation and licensing barriers are forcing multi-state operators toward niche insurers, while product liability concerns remain underexplored.
Implications for brokers and clients
- Cyber and environmental coverage should be incorporated into cannabis portfolios.
- Clients operating across jurisdictions require compliance-aware, multi-state policies.
- Labelling, dosage, and product recalls must be treated as core liability risks.
Source: Cannabis Risk Manager, (July 22, 2025), Cannabis Insurance Trends in 2025: What’s Changing?
Aviation’s Emerging Risks: Navigating the Insurance Gap in a Tech-Driven Future
Only 3 in 10 aviation firms believe their current strategies will withstand the next 10 years. Climate change, geopolitical instability, and cyber disruption are leading threats, but remain under-addressed in most insurance programs. Varying preparedness across regions suggests global aviation is flying into the future with outdated risk models and incomplete protection.
Implications for brokers and clients
- Regional risk variation must drive tailored underwriting, not one-size-fits-all models.
- Business interruption and cyber exposure should be reassessed annually.
- Clients may require new endorsements for non-traditional or emerging threats.
Source: Insurance Business Magazine, (July 21, 2025), Aviation industry unprepared for emerging risks: Willis report
Brokers May Be Liable for AI-Generated Errors
Brokers using AI to generate insights or recommendations may be held liable if those tools produce flawed output. Legal experts warn that excessive reliance on AI, without human oversight, could breach duty-of-care. Brokers using AI should reassess E&O policies and internal governance frameworks. Inaccurate AI advice is no longer just a technical issue, it’s a growing liability risk for firms embedding generative models in client-facing roles.
Implications for brokers and clients
- E&O policies should be checked for AI-related exclusions or ambiguous clauses.
- Human-in-the-loop governance should be documented for any client-facing AI usage.
- Coverage reviews should anticipate regulator scrutiny of AI-influenced advice.
Source: Canadian Underwriter, (July 15, 2025), Are brokers legally responsible if AI spits out bad information to clients?
Over 400 Organizations Hit, Rethinking Risk in the Age of State-Linked Cyber Warfare
Chinese state-linked hacking groups have exploited security vulnerabilities in Microsoft’s SharePoint servers, compromising over 400 entities, including the US nuclear weapons agency. The attack highlights how common enterprise software can act as a single point of systemic failure. Supply chain compromise, not just direct attacks, now presents the greatest threat to digital infrastructure.
Implications for brokers and clients
- Cyber coverage should account for third-party software compromise and cascading loss.
- Shared infrastructure and SaaS dependencies need sharper underwriting scrutiny.
- Expect rising demand for policies that cover state-linked threat actors and attribution ambiguity.
Source: The Guardian, (July 23, 2025), US nuclear weapons agency ‘among 400 organisations breached by Chinese hacker’
AI-Powered Liability Coverage for Digital Healthcare
A new Allied Healthcare Professional Liability product is tackling the evolving risks of tech-enabled care, offering specialised coverage for underserved providers such as diagnostic centers, home healthcare services, and medspas. As remote diagnostics and digital tools become more common, exposure to errors and malpractice claims is rising. At the same time, growing tech costs are pushing smaller providers toward insolvency, driving demand for tailored liability solutions that address both clinical risk and technology-driven negligence.
Implications for brokers and clients
- Clients offering remote or tech-driven healthcare need hybrid liability solutions.
- Policies should include cover for diagnostic error, software failure, and device miscommunication.
- Smaller providers may require modular coverage to match evolving service models.
Source: Business Wire, (July 22, 2025), Counterpart adds Allied Healthcare Professional Liability Product to Agentic Insurance ™ Platform, Appoints Chris Robowski to Lead Expansion
