Contracts Covering Risk As Insurance Retreats from AI Exposure

As insurance retreated from AI exposure, contracts began absorbing functions that insurance once performed. Indemnities compressed. In effect, contracts began underwriting elements of AI risk. This shift has significant consequences for lawyers drafting, negotiating and advising on AI-related agreements.

6 minute read March 01, 2026 at 12:17 AM
By
Olga V. Mack
Contracts Covering Risk As Insurance Retreats from AI Exposure

For much of the last decade, technology risk followed a familiar pattern. New risks emerged, insurers studied them, coverage evolved, and contracts allocated exposure against an insurance backstop that, while imperfect, was assumed to exist.

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