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From cannabis regulation to gambling law, this edition of Risk Wrap highlights six developments shaping compliance, governance, and insurance exposure across high‑risk industries.
Indiana Reopens Medical Marijuana Debate as Federal Cannabis Decision Nears
Lawmakers in Indiana may soon revisit medical marijuana legislation after years of unsuccessful reform efforts. However, federal cannabis rescheduling is stalled in an ongoing Drug Enforcement Administration process, and state officials say any formal response would likely depend on federal action being finalized. Federal hearings on rescheduling are due to start in June 2026.
Senator Mike Bohacek plans to introduce legislation in 2027 that would legalize medical marijuana in Indiana and create a regulatory framework for its sale, distribution, and use. The proposal would also establish marijuana-related tax policies, update THC impairment standards, and establish additional requirements for law enforcement training.
Governor Mike Braun has also expressed openness to discussions on marijuana policy but hasn’t endorsed full legalization.
Implications for brokers and their clients:
- Companies involved in cultivating, manufacturing, or dispensing cannabis products may consider product liability coverage to address potential claims arising from product defects or adverse consumer reactions.
- As regulation changes, consider D&O insurance to protect executives from claims related to governance and compliance.
- Investigate tailored cannabis insurance that safeguards firms against the risks present across the value chain.
Source:https://indianacapitalchronicle.com/category/gvt-politics Indiana Capital Chronicle (May 12, 2026). Indiana regulators awaiting final federal marijuana action as lawmaker drafts legalization bill.
Emerging insurance industries mentioned: Cannabis Insurance.
Lines of business mentioned: Product Liability Insurance, Directors and Officers Liability Insurance.
“You Can’t Copyright Facts”: Perplexity’s Defense in Latest Copyright Suit
Perplexity is facing another copyright lawsuit, this time from CNN. CNN claims that Perplexity is unlawfully distributing content that’s “identical or substantially similar” to its own copyrighted content, including thousands of news stories, videos, and images.
CNN is seeking damages and a court order that would block Perplexity from violating its IP rights. In a recent statement, CNN said that a company worth tens of billions of dollars like Perplexity shouldn’t be able to steal others’ original content.
A spokesperson for Perplexity has been quoted saying, “you can’t copyright facts”.
Implications for brokers and their clients:
- Consider media liability insurance to protect against IP infringement claims arising from content use or distribution.
- Consider tech E&O insurance in case AI systems are accused of infringement due to system errors.
- Ensure existing D&O policies provide sufficient protection where claims are related to governance surrounding AI-related risks.
Source: Reuters (May 28, 2026). CNN files lawsuit against Perplexity alleging unlawful content distribution.
Lines of business mentioned: Media Errors and Emissions Insurance, Tech E&O Insurance, Directors and Officers Liability Insurance.
Taylor Swift’s Trademark Filings Highlight Growing Risks of AI Clones
Copyright claims represent only one dimension of AI-related IP risk. In response to the growing spread of AI-generated content falsely depicting her voice, image, and endorsements, Taylor Swift’s IP and brand management company, TAS Rights Management, filed trademark applications covering short clips of her voice and visual likeness. These filings are designed to address the risk of consumers believing that Swift supports a product or political message when she doesn’t.
Most AI litigation to date has focused on copyright issues. However, copyright law primarily protects creative works, not a person’s identity, so it may offer limited recourse when AI content imitates someone’s voice or appearance without directly copying copyrighted material.
Instead, these disputes often fall under the category of publicity rights, which protect individuals from the unauthorized commercial use of their name, image, likeness, or other identifying characteristics.
Laws on publicity rights vary by state. This patchwork approach prompted the development of the NO FAKES Act, which is currently under consideration by the Senate Judiciary Committee.
Under existing federal law, courts generally distinguish between uses like parody versus deception or fraud. As a result, these disputes are often handled on a case-by-case basis. Until legislation like the NO FAKES Act comes into effect, uncertainty about the scope of protection remains.
Implications for brokers and their clients:
- AI firms may investigate tech E&O cover for claims alleging that their products or services failed to prevent unlawful outputs, including unauthorized digital replicas.
- Consider media liability insurance to protect against lawsuits involving infringement of publicity rights, misappropriation of likeness, false endorsement, and other content-related claims.
- Investigate dedicated AI insurance to protect against the broad array of risks affecting AI companies across jurisdictions.
Source: Fortune (May 30, 2026). Taylor Swift just exposed a blind spot in AI law — and it’s bigger than copyright.
Emerging insurance industries mentioned: Artificial Intelligence Insurance.
Lines of business mentioned: Media Errors and Emissions Insurance, Tech E&O Insurance.
Unauthorized Minting Attacks Expose Weaknesses in Crypto Governance
On June 1, 2026, a BNB Chain-based project, TesseraDAO, suffered a major exploit that resulted in around $2.4 million in losses. The attacker minted 99 million TSR tokens without authorization and sold them, causing TSR’s value to collapse by nearly 99%.
The exploit was first flagged by on-chain analyst, Specter, who later reported that the stolen proceeds had been transferred through Tornado Cash, an OFAC-sanctioned mixer service.
It’s been suggested that the attacker either accessed the token’s minting function through a compromised admin key or exploited a vulnerability in the minting logic.
The incident reflects a growing trend in 2026 involving unauthorized token minting attacks. Many token contracts have a minting function that hackers can access if they exploit the right code path or obtain the right credentials. When authority is centralized in a single private key, deployer wallet, or small group of admins, the project’s security becomes heavily dependent on the protection of those credentials.
Implications for brokers and their clients:
- Investigate cyber liability insurance that’s tailored to the risks facing crypto firms.
- Review whether existing crime insurance policies protect against losses resulting from stolen private keys, compromised credentials, and other forms of unauthorized access.
- Investigate tailored digital assets and web3 insurance that protects against risks related to smart contract failures, compliance, governance, and more.
Source: The Crypto Times (June 2, 2026). TSR Token Collapses 99% Following 99M Token Mint Exploit on BNB Chain.
Emerging insurance industries mentioned: Digital Asset and Web3 Insurance.
Lines of business mentioned: Cyber Liability Insurance, Digital Asset Crime Insurance.
Crypto Losses Fall, but Smart Contract Vulnerabilities Remain the Leading Threat
According to data from CertiK, crypto losses fell sharply in May 2026, totaling around $63.8 million compared to roughly $650 million in April. Improved audits and protocol upgrades may be partly responsible for the decline.
Code vulnerabilities were the largest source of losses in May, accounting for around $45 million. Wallet compromises accounted for $13.8 million, while phishing attacks represented a small share of $2.6 million.
Asset recovery is still notoriously difficult. Only $9.4 million of May’s stolen funds have been recovered so far, making prevention essential.
Implications for brokers and their clients:
- Investigate smart contract failure insurance to protect against losses arising from code errors or unintended behavior in smart contracts that lead to exploits and financial damage.
- Investigate crypto custody insurance to cover losses resulting from the theft, compromise, or unauthorized access of digital assets held in custody.
- Consider cyber liability insurance to cover the costs of responding to security incidents, including forensic investigations and breach remediation.
Source: Coin Edition (June 1, 1016). Crypto Exploits Fall to $68.3M in May 2026, CertiK Reports.
Lines of business mentioned: Smart Contract Failure Insurance, Cyber Liability Insurance.
DRC Launches Real-Time Gambling Surveillance Under FATF Pressure
The Democratic Republic of Congo is implementing a centralized gambling monitoring platform designed to improve regulatory oversight and strengthen compliance. The initiative forms part of broader efforts to combat money laundering, as the DRC is on the FATF’s gray list due to its weak financial regulation system.
The platform will also improve tax collection, prevent illegal activity, and address consumer protection issues, including addiction and underage gambling.
Regulators will have real-time visibility of operator activity, including betting volumes and revenue data. The system will detect violations concerning vulnerable individuals and will send alerts for suspicious activity like sudden spikes in transactions or irregular gambling behavior.
Implications for brokers and their clients:
- Consider D&O insurance to protect executives from claims alleging failures in compliance, governance, or AML controls.
- Consider strengthening cyber liability insurance where operators collect and transmit large volumes of customer and transaction data through centralized monitoring systems.
- Investigate gambling insurance that safeguards against risks related to player liability, payment fraud, and regulatory compliance.
Source: SiGMA (June 3, 2026). The DRC plans unified gambling oversight platform under FATF scrutiny.
Emerging insurance industries mentioned: Gambling Insurance.
Lines of business mentioned: Directors and Officers Liability Insurance, Cyber Liability Insurance.
