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From AI harm to gambling regulation, this edition of Risk Wrap highlights six developments shaping compliance, governance, and insurance exposure across high‑risk industries.
New OpenAI Lawsuit as ChatGPT Accused of Encouraging FSU Shooting
“If ChatGPT were a person […] it would be facing charges for murder,” said Attorney General James Uthmeier when announcing one of the latest investigations into OpenAI’s alleged encouragement of mass shooting incidents. A lawsuit has since been filed by the widow of a victim killed in the shooting at Florida State University (FSU).
The perpetrator, Phoenix Ikner, had been engaged in extensive discussions with ChatGPT on disturbing topics, including his interest in mass shootings. He inquired about how the media might cover a shooting at FSU, to which ChatGPT responded that “if children are involved,” the incident would attract more attention. The chatbot also provided information about weapons and ammunition and advised on what time of day to carry out the attack.
OpenAI has denied responsibility, arguing that ChatGPT merely “provided factual responses to questions with information that could be found broadly across public sources on the internet,” and denying that it encouraged harmful activity.
However, critics argue that the months-long conversations with a disturbed individual presenting clear warning signs offered multiple opportunities for escalation or intervention.
This case follows another lawsuit against OpenAI in relation to the Tumbler Ridge shootings in British Columbia, filed by the families of seven victims.
Implications for brokers and their clients:
- Review whether existing general liability or product liability policies explicitly address claims arising from harm caused by AI systems.
- Review directors’ and officers’ coverage for protection against shareholder and regulatory actions alleging inadequate AI governance, safety controls, or risk oversight following high-profile incidents.
- Investigate AI insurance solutions that are designed to protect firms from the sector’s risks.
Source: Futurism (May 11, 2026). OpenAI Sued for Mass Shooting: “If ChatGPT Were a Person, It Would Be Facing Murder Charges.”
Emerging insurance industries mentioned: Artificial Intelligence Insurance.
Lines of business mentioned: General Liability Insurance, Product Liability Insurance, Directors and Officers Liability Insurance
Europe’s Cannabis Market Faces New Marketing Compliance Challenges as Patient Access Expands
Cannabis industry experts believe the European market is entering a stage of maturation. In the words of Green Success CEO, Yuval Soiref, “The European market is moving out of its first phase, which was largely driven by supply, into a more disciplined, infrastructure-led environment.”
With cultivation and distribution now well established, the focus is on improving patient access. Key markets like Germany and the UK are likely to serve as important indicators for how the wider market may develop, especially in areas like regulation and prescribing frameworks.
A key challenge when reaching patients on a scale is compliance with strict marketing rules. Companies will need compliant marketing structures built into their commercial models from the start. Those unable to navigate these rules may struggle to scale, even with strong products.
Implications for brokers and their clients:
- Investigate media liability insurance for exposure from restricted advertising, patient communications, and online marketing claims.
- Review whether existing professional indemnity insurance explicitly covers the risks involved with prescribing cannabis products.
- Confirm whether existing policies cover regulatory defense costs for investigations or enforcement action arising from alleged breaches of advertising and patient communication rules.
Source: Business of Cannabis (May 11, 2026). VOICES OF CANNABIS EUROPA: GREEN SUCCESS’ YUVAL SOIREF ON THE NEXT PHASE OF EUROPEAN CANNABIS
Lines of business mentioned: Media Errors and Emissions Insurance, Errors and Omissions Insurance.
Pakistan Brings Crypto Under Formal Oversight
Pakistan has passed the Virtual Assets Act 2026, creating a formal legal framework for regulating digital asset firms. The law establishes the Pakistan Virtual Assets Regulatory Authority (PVARA) as the country’s regulator for licensing, supervising, and enforcing compliance among virtual asset service providers.
The framework is expected to strengthen investor protection, transparency, and market integrity, and combat illicit activity in line with international standards.
PVARA is coordinating with national institutions during the transition, developing a regulatory sandbox and introducing rules that require prior authorization for virtual asset pilots, partnerships, and implementations involving users in Pakistan.
Implications for brokers and their clients:
- Investigate cyber liability insurance and digital asset crime coverage to protect against hacks and digital asset theft, as regulatory scrutiny of operational resilience may increase.
- Review D&O insurance to help protect senior management against regulatory investigations, governance disputes, and enforcement actions as the sector becomes more tightly regulated.
- Consider obtaining dedicated digital asset insurance that protects firms against the sector’s novel risks.
Source: Digital Watch (May 10, 2026). Pakistan passes landmark law to regulate crypto firms.
Emerging insurance industries mentioned: Digital Asset and Web3 Insurance.
Lines of business mentioned: Cyber Liability Insurance, Digital Asset Crime Insurance, Directors and Officers Liability Insurance.
Israel Cracks Down on Medical Cannabis as Officials Question Consumer-Style Growth
The Israeli Health Ministry is taking steps to tighten its medical cannabis regulation after the market’s rapid expansion. Since medicalization reforms were initiated, the number of medical cannabis licenses surged, reaching around 140,000 in 2024, up from 33,000. Some ministry officials believe the usage patterns driving this growth more closely resemble those of a consumer market than a healthcare system.
Possible changes may include:
- A phased ban on smokable cannabis, as smoking is not a standard medical administration route. Exceptions would apply to individuals over 75 and the terminally ill. The ban would take place over three years.
- The transfer of responsibility for all medical cannabis treatment to health maintenance organizations within one year. The intention here is to integrate cannabis into the standard healthcare system.
- Stricter criteria for PTSD. Access would be reserved for patients experiencing severe distress involving significant agitation, lack of sleep, and flashbacks. In addition, it would only be accessible alongside psychotherapy or other proven forms of treatment.
Implications for brokers and their clients:
- Review errors and omissions insurance to ensure continued protection as responsibility for treatment becomes more integrated into the mainstream healthcare system.
- Investigate business interruption insurance in case of operational disruptions caused by regulatory actions.
- Investigate dedicated cannabis insurance that safeguards firms against the sector’s evolving regulatory risks.
Source: Hemp Gazette (May 4, 2026). Israel Health Ministry Proposes Significant Tightening of Medical Cannabis Regulation.
Emerging insurance industries mentioned: Cannabis Insurance.
Lines of business mentioned: Errors and Omissions Insurance, Business Interruption Insurance.
EU AI Omnibus Delays High-Risk AI Rules While Expanding AI Office Oversight
An agreement has been reached on Digital Omnibus on AI (or AI Omnibus) which will simplify certain provisions of the EU’s AI Act. Most of the Act’s provisions were set to take place on August 2, 2026, but some have been postponed.
The rules for certain high-risk AI systems covered by Article 6(2) and Annex III will now apply from December 2, 2027. Meanwhile, obligations for high-risk AI systems already regulated under existing sector-specific laws listed in Annex I and covered by Article 6(1) have been postponed until August 2, 2028. The agreement also updates the definition of a “safety component” within the legislation.
A new mechanism will allow the European Commission to decide when existing sector-specific laws already contain AI rules equivalent to those in the AI Act. In those cases, some parts of the AI Act may not need to apply. The Commission will also publish guidance to help businesses comply with both the AI Act and existing product safety regulations.
Compliance for SMEs will also be simplified. A newly defined category called “small mid-cap” enterprises has been established. These firms employ less than 750 people and have a maximum annual turnover of €150 million or an annual balance sheet total not exceeding €129 million. For these firms, quality management expectations will be more proportionate, technical documentation templates will be simplified, and penalty caps will be tailored.
The AI Omnibus increases enforcement powers at the EU level, giving the AI Office oversight of AI systems when both the general-purpose AI model and the systems using it are developed by the same company or corporate group. It will also supervise AI systems used within “very large online platforms” and “very large online search engines” covered by the EU Digital Services Act. National authorities will still oversee certain sectors, including law enforcement, border management, judicial bodies, and financial institutions.
Implications for brokers and their clients:
- Investigate product liability exposure where AI systems are integrated into products or services with safety implications.
- Assess whether existing policies cover regulatory defense costs in case of investigations, audits, or enforcement action linked to the EU AI Act.
- Consider partnering with insurers who offer AI coverage backed by expertise in the region’s regulatory environment.
Source: JD Supra (May 8, 2026). EU’s Digital Omnibus on AI: 7 Key Changes You Need to Know.
Emerging insurance industries mentioned: Artificial Intelligence Insurance.
Lines of business mentioned: Product Liability Insurance.
Colombia Tightens Responsible Gambling Rules with New Compliance Demands for Operators
A new responsible gambling agreement for operators in Colombia was approved on April 23, 2026. The measures apply to online gambling operators offering Lottery, Permanent Bets, Chance games, and RASPA&LISTO products.
Under the new agreement, users will be able to complete an online assessment to evaluate their level of risk for problematic gambling behavior. Self-exclusion mechanisms will remain voluntary and operator-specific, and operators must make self-exclusion forms easily accessible through their websites and retail locations.
The minimum self-exclusion period is 30 days. The user selects the dates and if no revocation request is submitted before the end of the period, the exclusion will automatically renew for a further 30 days. Operators must also keep records of self-excluded users and revocation requests.
The agreement requires operators to establish a formal Responsible Gambling Policy covering three groups: players without identified risk factors, players considered at risk or self-excluded, and non-gamblers. Additional measures focus on the protection of minors. Advertising materials must include warnings and must not target minors.
Operators will have to submit implementation and effectiveness reports on their responsible gambling programs to the CNJSA within 15 days of the end of each semester, as well as annual reports on program impact.
The Technical Secretariat will have authority to conduct audits and take other actions necessary to ensure compliance.
Implications for brokers and their clients:
- Investigate media liability insurance for exposure linked to advertising restrictions and responsible gambling messaging.
- Consider errors and emissions insurance where staff are responsible for identifying at-risk users, managing self-exclusion processes, or implementing player protection measures.
- Investigate bespoke gambling insurance that protects against risks relating to player protection, fraud, and regulatory enforcement.
Source: iGamingToday (May 13, 2026). Colombia Introduces New Responsible Gambling Rules for Online Lottery and Chance Operators.
Emerging insurance industries mentioned: Gambling Insurance.
Lines of business mentioned: Media Errors and Emissions Insurance, Errors and Omissions Insurance.
