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From space law to disputes on AI harm, this edition of Risk Wrap highlights six developments shaping compliance, governance, and insurance exposure across high-risk industries.
UK Moves to Cap Liability for Space Companies in a Bid to Unlock Investment and Compete Globally
In mid-December, the UK space sector took a step forward with parliamentary approval of the Space Industry (Indemnities) Bill, which introduces a mandatory cap on the indemnities that space operators have to pay to the government.
The measure is intended to reduce uncertainty for investors and insurers backing UK-based ventures, following recommendations in a House of Lords report called The Space Economy: Act Now or Lose Out.
The bill aligns the UK more closely with other major space-faring nations that already limit operator liability, potentially strengthening the country’s competitiveness.
However, industry stakeholders note that while the bill improves the investment environment, broader challenges remain, like the need for clearer long-term policy direction and stronger government coordination.
Implications for brokers and their clients:
- Review whether additional coverage above the cap is required for any residual third-party risks, ensuring full protection.
- Beyond third-party risk, investigate bespoke space insurance policies that address cyber, supply chain, launch failure, compliance, and other key risks.
- Partner with insurers who understand the regulatory landscape affecting space companies across jurisdictions.
Source: fDi Intelligence (December 18, 2025). UK space gets legislative boost.
Turkmenistan Opens the Door to Crypto Mining and Exchanges Under New Law
Turkmenistan has legalized cryptocurrency mining and the operation of crypto exchanges and custody services under the new Law on Virtual Assets, signed on November 28 by President Serdar Berdimuhamedov. This comes as part of an effort to boost economic development and attract foreign investment.
Companies and individuals are now allowed to mine crypto, subject to registration with the Central Bank. The law sets technical requirements for mining and explicitly bans covert mining practices like cryptojacking.
Exchanges and custodial services require a license from the Central Bank. Domestic and foreign entities can offer these services as long as they’re not based on or associated with offshore jurisdictions. Anonymous transactions and wallets are banned, and companies must enforce AML and KYC rules.
While crypto is now permitted within these regulated activities, it’s not recognized as legal tender. The law instead treats digital assets as property or investment instruments.
Implications for brokers and their clients:
- Regulatory investigation and management liability cover should protect the entity and its directors against investigations, enforcement actions, and associated defense costs arising from breaches of the Law on Virtual Assets and related AML/KYC obligations.
- Investigate tech E&O insurance that responds in case non-compliance with AML/KYC requirements results from technical faults.
- Investigate business interruption insurance that addresses operational shutdowns resulting from license suspension or regulatory investigations.
Source: CoinDesk (January 2, 2026). Turkmenistan legalizes crypto mining and exchanges to boost the economy.
Scrutiny Over AI Liability as Grok Produces Illegal Content
The controversy over AI chatbot Grok has intensified debate about who’s legally responsible for harmful AI-generated content.
After Grok was found generating non-consensual and explicit images, Musk stated that users, and not the chatbot or its developers, should be held liable for illegal outputs. He argued that individuals prompting the system are responsible for what it produces and will face the same consequences as if they uploaded unlawful material directly.
Regulators around the world responded. For example, India’s Ministry of Electronics and IT demanded an Action Taken Report on the basis of failure to prevent unlawful content, while French authorities pushed for action under the EU’s Digital Services Act.
This dispute points to the broader ambiguity in global AI regulation and exposes gaps in AI governance. Critics insist that even if users are held accountable for their actions, that doesn’t negate the duty of platforms to implement safeguards.
Implications for brokers and their clients:
- AI companies should ensure professional liability and tech E&O policies explicitly cover regulatory investigations and enforcement actions resulting from AI outputs.
- Investigate media liability coverage to fund PR support and remediation costs in case of an incident.
- Review policy wording for jurisdictional breadth, ensuring coverage responds to actions by regulators in multiple countries where AI systems are accessible.
Source: Gulf News (January 4, 2026). Musk says users, not Grok, are liable — but regulators aren’t convinced.
Crypto Exchanges Face a Reckoning as South Korea Tightens Liability Rules
South Korea is moving toward a regulatory overhaul that would subject cryptocurrency exchanges to bank-style, no-fault liability rules. This comes after a series of high-profile incidents revealed gaps in existing rules. For example, several major exchanges have had repeated outages and cybersecurity incidents in recent years, but users weren’t always compensated.
Under the proposed regime, exchanges would have to compensate customers for losses without proving negligence. Serious violations may attract greater penalties than before (up to 3% of an exchange’s annual revenue). Companies may also have to tighten their cybersecurity practices and implement stronger cold storage policies, standardized IT controls, and more transparent operational disclosures.
Implications for brokers and their clients:
- Given mandatory customer compensation, investigate dedicated crypto custody insurance that covers losses from hacks, system failures, and cold-storage breaches.
- Assess existing crime and cyber insurance policies to ensure alignment with tighter safeguarding requirements.
- Review regulatory liability coverage to ensure it responds to investigations and penalties introduced under strict supervision.
Source: Blockchain Council (December 9, 2025). South Korea to Impose Bank-Level Liability on Crypto Exchanges.
Study Finds Widespread Mislabeling and Hidden THC in CBD Gummies
A University of Kentucky study found that CBD gummies sold online are often mislabeled. About 70% of the 56 products tested contained CBD amounts differing by over 10% from what was listed on the packaging, and 39% contained detectable levels of delta-9 or delta-8 THC that weren’t clearly disclosed.
Researchers concluded that unregulated CBD product labeling is unreliable both between brands and within bottles, posing potential risks like unexpected positive drug tests.
These findings align with other analyses organized by the FDA that have shown variation between the potency on the label and the actual potency of CBD and hemp-derived cannabinoid products. High levels of harmful contaminants and heavy metals have also been detected.
The study points to the need for more standardized testing in the CBD market to ensure consumer safety.
Implications for brokers and their clients:
- Secure robust product liability insurance to cover consumer claims and legal defense arising from the mislabeling of CBD gummies and other cannabis products.
- Investigate product recall coverage to fund recall execution, product replacement, disposal, and customer notification costs if mislabeled or contaminated batches must be removed from the market.
- Review regulatory errors and omissions coverage to ensure it responds to investigations, enforcement actions, and compliance failures linked to labeling accuracy, testing standards, and evolving FDA oversight.
Source: Cannabis Science and Technology (June 16, 2025). CBD Gummies Study Reveals Inconsistent Product Labeling.
Industry Leaders Say Chile Is Nearing Online Gambling Reforms
Chile’s gambling industry is pressing for a long-awaited overhaul of the country’s regulatory framework, with sector voices expressing optimism that 2026 will finally see comprehensive legislation passed to govern online gaming.
In an interview with Yogonet, Cecilia Valdés, Executive President of the Chilean Association of Gaming Casinos (ACCJ), explained that the industry had moved forward in 2025 in terms of “positioning, technical rigor, and institutional dialogue”, and awareness was raised about the contribution that land-based casinos make to employment, tax revenues, and regional development.
When the time comes for reform, the ACCJ will focus on aligning regulation between land-based and online casinos, consumer protection, responsible gaming safeguards, and market competitiveness. The Association is hopeful that the new government will prioritize reform.
Implications for brokers and their clients:
- Companies looking to operate in Chile should partner with insurers with sector expertise that can offer comprehensive coverage of all relevant risk categories.
- Operators would need to investigate coverage to protect against investigations and enforcement actions as the regulatory environment shifts.
- Other essential areas to investigate when the time comes would include cover against cyber incidents, crime, and player disputes.
Source: Yogonet (December 24, 2025). “We hope that 2026 will be the year Chile adopts comprehensive gambling regulation”.
