Why does Testudo require a schedule of the covered generative AI system?

Scheduling specific systems gives the client certainty of coverage. Blanket policies often lead to coverage disputes. The schedule also protects the client from shadow AI, where employees use unsanctioned AI tools without IT approval. We write coverage for the AI systems the client has reviewed and approved. Anything outside that list we don't price, because we don't know it exists. A schedule keeps coverage and premium aligned to what's actually deployed. We are happy to add new Gen AI systems to the schedule on request, subject to an underwriting review.

Why does Testudo focus only on the US?

Testudo writes US risks today because the US is where the claims environment is most developed. That includes ISO CGL exclusions from January 2026 and the bulk of early-stage AI litigation in federal and state courts. Our underwriting data (claims development, deployment patterns, model performance) is mainly US-sourced. We expect to expand internationally as non-US markets reach the same claims maturity. For a global client operating worldwide with a US HQ, or any other bespoke risk, please reach out to the team on a case-by-case basis.

Who is the target market?

Commercial companies from mid-market through large enterprise. You can pitch this across most of your book, including manufacturers, retailers, professional services, banks, and healthcare organizations. If a client is using generative AI internally, in a customer-facing, or decision-making workflow, they are in the target market. We supply risk reports to the broker to help start the conversation. They come industry-specific, or company-specific for a named policyholder.

Does Testudo cover AI hallucinations?

Yes. AI hallucinations are covered under the Generative AI Errors insuring agreement, which responds when a generative AI system the insured has deployed produces a false or misleading output and a third party suffers financial loss relying on it. "AI hallucination" is the common name for this failure mode. On the Testudo form it is one of six insuring agreements, alongside IP Infringement and Personal Injury, Unauthorized Data Disclosure, Bodily Injury, Property Damage, and AI Regulatory Proceedings.

What is the overlap between Testudo's policy and cyber insurance?

Cyber insurance may include a narrow section covering media liability. Testudo's IP Infringement and Personal Injury agreement responds to copyright, trademark, libel, and slander from a generative AI output in one trigger. Cyber wordings vary widely, and in our view that coverage is rarely sufficient for an AI-deployer policyholder, because cyber forms were written for network and data-breach events, not for Gen AI output liability. Where the client already has the coverage under another policy, we can write this policy on a modular basis so only the coverage required needs to be purchased.

Does the Testudo policy pay for cyber-attacks caused by generative AI if the cyber policy excludes it?

No. We exclude cyber-attacks. If the loss is caused by a cyber-attack, the cyber insurer pays, subject to the cyber contract. Cyber insurance policies generally respond to the defined 'Computer System.'

Will this product be sold to consumers?

No. Testudo's Generative AI Third-Party Liability is a commercial-only product.

For Brokers

The standalone policy for generative AI liability, distributed through brokers only.

Your clients are deploying generative AI. Their E&O and CGL forms exclude third-party harms caused by that AI (ISO endorsements CG 40 47, CG 40 48, and CG 35 08, from January 1, 2026). Testudo writes the standalone third-party liability policy that fills the gap.

A+ (Superior) capacity

01
What is generative AI?
Generative AI refers to models that produce new content (text, images, video, audio, or code) in response to a prompt. ChatGPT by OpenAI and Claude by Anthropic are the best-known examples, and they're the same systems your clients are already running.
02
Your insureds are already using generative AI today.
50%+
of U.S. organizations have deployed AI in at least one business function (McKinsey, State of AI survey, 2024-2025)
From content generation to website chatbots, organizations across most industries are putting generative AI into production. The accounts you'll renew next month are already using AI in production.
03
Liability is rising, and coverage is being taken away.
140%+
year-over-year growth in AI-related U.S. lawsuits filed (Testudo AI Risk Engine case-law tracker, May 2026)
ISO AI exclusions (General Liability endorsements CG 40 47 and CG 40 48, effective January 1, 2026, plus a parallel products and completed operations form CG 35 08) have been filed, and similar carve-outs are spreading into E&O and Professional Lines. As the claims land, more carriers will exclude this exposure.
04
Get appointed. Distribute AI insurance.
Get appointed
Standard producer agreement, no volume minimums, onboarded in 3-5 days. Your first submission can be the same week.
Book a webinar
Live session where we walk your team through AI exposure, coverage, and how to sell AI insurance. Virtual or in-person.

Third-Party Generative AI Liability Cover

What does the policy cover?

Six insuring agreements purpose-built for generative AI deployer exposure.

Our policy responds when a generative AI system that the insured has deployed causes harm to third parties. Coverage triggers and definitions are written for how generative AI systems actually cause legal liability.

Generative AI Errors

aka AI hallucination

Financial loss suffered by a third party arising from a hallucination or other negligent error or misstatement caused by a generative AI output.

IP Infringement and Personal Injury

Covers third-party claims arising from generative AI outputs that allegedly infringe IP rights or cause personal injury-type harm, including defamation, privacy/publicity violations, copyright or trademark/trade dress infringement.

Unauthorized Data Disclosure

Liability arising from the unauthorized disclosure of Protected Information through a generative AI output.

Bodily Injury

Bodily injury to a third party who interacts with, or relies upon the generative AI tool the insured has deployed.

Property Damage

Third party property damage arising from the interaction with, or reliance upon the generative AI tool the insured has deployed.

AI Regulatory Proceedings

Defense costs, plus civil fines and penalties where insurable by law, when a governmental or regulatory authority brings an action alleging your deployment of a generative AI system violated an AI regulation or law.

Limits & pricing

$10MMaximum aggregate

$1M-$10M+Limit range

Our claims-made coverage is distributed on an excess-and-surplus-lines basis.
Lloyd's provides A+ (Superior) A.M. Best-rated capacity.
Higher limits available case-by-case for qualified risks.
Pricing runs on our own risk models, rated based on the insured's characteristics and generative AI deployments.
Governing law is New York.
Read more on generative AI insurance, and how the Generative AI Errors agreement responds when a deployed AI produces a false or misleading output.

WHO'S IT FOR?

Our target customers.

Any organization that has deployed generative AI in its operations.

Your deployer clients sit at the end of the AI value chain. They don't build the models. They operate them. That's where the exposure sits.

Developers

The developer creates the foundational model, such as GPT-5 or other large language models. They own the core training, architecture, and base functionality. Examples include OpenAI, Anthropic, Google, xAI, Cohere, and Mistral.

Vendors

The vendor customizes or modifies the foundational AI model to create a specific generative AI system or application (e.g., a chatbot) and sells it to deployers. Examples include Cursor, Harvey AI, Bland.AI, and Microsoft Co-Pilot.

Deployers

The deployer embeds a developer's or vendor's AI system into its operations as customer chatbots, internal copilots, and workflow automation. Our target customers: any commercial company running generative AI in production, from manufacturers and retailers to healthcare and professional services.

Conversation starters

Identify your clients generative AI liability exposure on your next renewal call.

Enable your clients to surface their generative AI liability risk by asking the following questions at renewal.

01
Are you currently using any generative AI, and if so, for what specific functions?
Generative AI systems include chatbots, support copilots, and virtual assistants.
02
How much visibility do your risk team and legal have into the specific Gen AI tools your business units are running today?
Even when 'Silent AI', where employees use AI without their enterprise knowing, causes harm, the liability still lands on the insured.
03
Have you confirmed with your current carriers that AI-related losses are still covered on your E&O, Cyber, and CGL placements this renewal?
Generative AI risk sits in a gap between incumbent forms. E&O, Cyber, and CGL weren't scoped for it, and carriers are now excluding it at renewal.

APPETITE

What we have appetite for.

The generative AI use cases and industries we lean into.

The lists below aren't exhaustive. They set expectations. If a client's use case or industry isn't listed, bring it to us and we'll handle it case-by-case.

Full appetite

Use cases

Beyond the featured verticals, we have the appetite to review generative AI deployed across these use cases:

Chatbots & agents (customer support and success, companion chatbots & agents)
Inbound/outbound calling
Embedded AI in product or safety features
Virtual meeting transcription
Pharmaceutical discovery
Creative output in advertising, design, and entertainment
Advertising and marketing content generation
Sales, CRM, and client acquisition
Procurement & vendor management
Personal and team efficiency (virtual executive assistants)
Data science and analytics
Internal compliance
Cyber security and threat detection (inc. fraud)
Supply chain

Industries

We have the appetite to review Gen AI deployed in these industries:

Accommodation and Food Services
Administrative and Support Services
Arts, Entertainment, and Recreation
Construction
Educational Services
Finance and Insurance
Health Care and Social Assistance
Information
Manufacturing
Mining, Quarrying, Oil and Gas
Professional, Scientific, Technical Services
Real Estate, Rental and Leasing
Retail Trade
Transportation and Warehousing
Utilities
Wholesale Trade

Claims Examples

What a generative AI claim looks like.

Hypothetical claim scenarios across Testudo's six insuring agreements.

Enterprise support
Support chatbots for enterprise companies in telecoms, SaaS, and fintech provide clients incorrect onboarding or integration steps, leading to client downtime and lost revenue.
Generative AI errors
Retail
A chatbot fabricates a sexual misconduct case against the CEO of a supermarket.
IP & personal injury
Healthcare
Wellness AI gives unsafe recovery guidance, allegedly causing physical injury.
Bodily injury
SaaS
A helpdesk AI provides a customer with incorrect steps for subscription cancellation and the customer gets charged for another year.
Generative AI errors
Marketing
AI writes a marketing campaign using a tagline that turns out to be a competitor's registered trademark, triggering a legal complaint.
IP & personal injury
E-commerce
A retail chatbot reveals another customer's order history, bank details, and address.
Unauthorized data disclosure
Legal services
Contract-summary AI misstates service terms, causing a missed contractual obligation.
Generative AI errors
Financial services
An AI vendor-risk summary falsely flags a supplier as being on a sanctions list.
IP & personal injury
Real estate
An AI assistant tells a building manager to set the HVAC to the wrong temperature, freezing and bursting the pipes in a tenant's unit.
Property damage
Telecoms
A state regulator opens an investigation alleging a company's AI-powered customer service chatbot violated the state's AI transparency and fairness requirements.
AI Regulatory Proceedings

Scenarios are hypothetical and shown for illustration. Coverage determinations depend on the specific policy wording and claim facts.

Want to know where your clients are deploying AI?

HOW IT WORKS

How does the policy work?

Generative AI Deployed

The insured uses a generative AI tool such as a website chatbot.

Harmful Output or Deployment

The generative AI tool deployed causes harm to a third party.

Claim Filed

The third party who was harmed sends a written demand or files a suit.

Insurance Responds

Testudo's policy responds to cover defense costs and settlements up to the policy limit for covered claims.

Submitting a risk

2.5Pages

A concise, client friendly application form, covering the applicant's business information and generative AI system deployments.

< 3 minTime to complete

High-level questions designed to be answered alongside the client in a single discovery call.

0Audits, tests or evals

No security audits, penetration tests, or AI evals. The application form is typically enough to price the risk, so there's nothing for your client's security team to clear before we quote.

Portfolio Review

We'll walk through your book with you, one account at a time, to map which insureds are using generative AI and where the liability risk sits providing an opportunity for cover.

You share a list of the named insureds in your book. We handle the classification, exposure grading, and appetite review. Most books come back within two business days of the list landing with our underwriting team.

Portfolio_Analysis · Sample broker book

Account

Gen AI use case

Exposure

Engage?

UW notes

Harbor Supply Co.Industrial Distribution

Customer support chatbot

Material

Yes

GAI Errors

Meridian Retail GroupRetail Trade

Marketing copy generation

Moderate

Yes

IP / PI

Bayline Health SystemHealthcare

Patient scheduling agent

Material

Yes

Unauth. Data

Crestwood LogisticsTransportation

Dispatch copilot

Low

Watch

Under review

Quadrant Consumer FinanceFinance & Insurance

Automated loan underwriting

Material

Out of appetite

BROKER EDUCATION

Book a webinar with our team.

We'll fly out or jump on video to educate your producers on AI exposure, and how to sell AI insurance with confidence.

VirtualZoom, Teams, Meet
In-personWe'll come to you

Gap Analysis

Existing policies leave material gaps.

Commercial General Liability, E&O, and Cyber can provide indirect coverage for some Gen AI risks, but none offers comprehensive protection. A purpose-built Generative AI Third-Party Liability policy is designed to fill the gap.

In response to damages arising from Gen AI outputs…

Commercial General Liability (CGL)

Errors and Omissions (E&O)

Cyber

Testudo's Gen AI TPL Product

Does the policy respond to third-party financial damages?

CGL does not cover pure economic loss.

Yes

Unless Gen AI exclusions are used.

Even if arising from a covered cyber event.

Yes

Under the Generative AI Errors insuring agreement.

Does the policy respond to third-party bodily injury?

Yes

Unless Gen AI exclusions are used.

E&O typically excludes bodily injury.

Cyber typically excludes bodily injury.

Yes

Under the Bodily Injury insuring agreement.

Does the policy respond to third-party property damage?

Yes

Unless Gen AI exclusions are used.

E&O typically excludes property damage.

Cyber typically excludes property damage.

Yes

Under the Property Damage insuring agreement.

Does the policy respond to third-party damages arising from unauthorized data disclosure?

CGL often has an access or disclosure exclusion.

E&O typically would not respond.

Partially

Potentially, depending on the wording.

Yes

Under the Unauthorized Data Disclosure insuring agreement.

Does the policy respond to personal injury?

Partially

To certain personal and advertising injury claims.

Partially

To a narrow definition of personal injury.

Partially

If personal injury is covered under 'media liability'.

Yes

Under the IP Infringement and Personal Injury insuring agreement.

Does the policy respond to inadvertent IP infringement?

Partially

To a narrow advertising-related IP infringement.

E&O excludes IP infringement.

Partially

IP infringement is narrowly defined under 'media liability'.

Yes

Under the IP Infringement and Personal Injury insuring agreement.

Does the policy respond to regulatory proceedings alleging an AI regulation violation?

Governmental/regulatory actions excluded.

Traditional coverage does not include AI regulatory violations.

Yes

Under the AI Regulatory Proceedings insuring agreement.