Insurers are rapidly filing generative AI exclusions for the liability policies contractors use when work goes wrong, according to a report from Trades Coverage. The report found 4,078 filed form adoptions across 49 states and Washington D.C. through July 31, up from zero in mid-2025, which means if an AI-assisted estimate, design or marketing error contributes to a claim, there’s an increasing chance it won’t be covered.
Of the 4,078 filed form adoptions, 3,955 involved coverage lines contractors and small businesses often buy, including commercial general liability, umbrella and excess, commercial package, business owners, and errors and omissions.
"A contractor might use AI for one estimate, takeoff or design decision and do the rest of the job without it,” said Matt Levin, head of research at Trades Coverage. “If that work contributes to a later claim, the exclusion could apply even though AI was used for only a small part of the project. The reviewed filings do not identify a comparable insurance product for contractors that covers the same exposure."
Read the full report here.
