Silent AI risks finally make some noise

AI & TechnologyCyberEmerging RiskMarket IntelligenceProfessional ServicesRegulation & ComplianceRisk

AI-related risks are a growing category of “silent AI” exposure, as they are not explicitly covered or excluded under insurance policy wordings across multiple classes, including professional indemnity, public liability, cyber and D&O. For policyholders, this means potential coverage gaps...

27 May 2026

3 mins read

Summary

A decade ago, “silent cyber” forced the market to confront unintended, unpriced coverage lurking among traditional policy lines. The same dynamic is now playing out with artificial intelligence, and it is accelerating faster than policy language, underwriting questionnaires or claims protocols.
By Ray Giblet and Timothy Chan, Norton Rose Fulbright

For policyholders, this means potential coverage gaps at the moment of claim. For insurers, it means unmodelled risk concentrated around a small number of AI model providers (e.g. foundation model developers such as OpenAI, Anthropic and Google) affecting a broad client base.

Insurers are also managing AI risk within their own organisations and upstream/downstream service providers.

In April and May 2026, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) each issued open letters to industry that AI governance failures and the increased risk of cyber threats are firmly in their sights.