CFC launches affirmative AI cover for intellectual property risks

CFC, the specialist insurance provider and pioneer in emerging risk, today announces the launch of affirmative AI coverage within its Intellectual Property policy.

AI is transforming how businesses create, develop and commercialise intellectual property. However, the legal framework governing the relationship between AI and IP remains fragmented and continues to evolve across jurisdictions. Questions concerning training data, ownership, infringement, liability and AI-generated outputs are creating new and increasingly complex exposures for businesses adopting the technology.

CFC's affirmative wording is designed to remove ambiguity without changing the fundamental scope of the policy. It provides confirmation that IP claims involving AI can remain covered where they would otherwise meet the policy's coverage requirements, giving brokers and their clients greater confidence as they navigate a rapidly changing risk landscape.

The enhancement recognises that AI-related IP exposures can arise throughout the technology lifecycle, from the data used to train a model and the algorithms underpinning it to the content and other outputs it generates. It also reflects a market in which responsibility for alleged infringement may fall on the business deploying or using an AI system, rather than solely on the technology provider.

"AI is creating enormous opportunities for businesses, but it is also introducing new and increasingly complex intellectual property risks," said Maddi Brown, IP Practice Leader at CFC. "Questions can arise at every stage of the AI lifecycle, from the data used to train a model and the technology itself to the outputs it produces.

"The legal and regulatory position remains uncertain and varies significantly across jurisdictions, making it difficult for businesses to assess their exposure. As investment and innovation in AI continue, we also expect businesses to place greater emphasis on protecting and enforcing the intellectual property rights associated with these technologies."

Our affirmative AI wording gives policyholders greater clarity. It confirms that where an AI-related intellectual property claim would otherwise be covered, the involvement of AI alone does not create uncertainty around how the policy responds. Maddi Brown, IP Practice Leader, CFC

"While no one can predict exactly how the relationship between AI and intellectual property will develop, we can give businesses confidence that they have specialist protection in place as they adopt the latest AI tools."

Unlike AI-related IP protection offered as a limited extension, CFC's standalone policy is designed to protect businesses against a broad range of IP disputes. The introduction of affirmative AI coverage builds on that specialist foundation, helping brokers provide clients with protection that reflects how intellectual property is being created and commercialised today.

The launch forms part of CFC's wider programme to embed affirmative AI coverage across its portfolio, providing customers with clearer and more explicit policy language as the use of AI becomes increasingly embedded in business operations.