Following a recent article run by the Financial Times which states that insurers QBE and Beazley are among the insurers that have proposed language for cyber insurance policies limiting payouts on AI losses, Daniel Winn from your Technology, Media, cyber and Sciences (TMCS) team provides his opinion on the current Cyber Insurance market.
Cyber Insurance for my business
In the wake of the high-profile Cyber attacks on M&S and Jaguar Land Rover in 2025, there’s a growing perception that cyber insurers are reducing their Cyber Insurance cover. The recent Financial Times article on AI risk which highlights that insurers may be looking at capping losses linked to new AI risks linked to Large Language Models (LLM) jacking and AI misuse which, on the surface, can feel like reduced cover.
Definition: LLM Jacking refers to attackers hijacking access to LLM APIs to run compute at the cost of your business; whilst this is quite niche, the definition could also mean AI misuse more broadly.
But that’s not necessarily the full story.
For many SMEs, the reality is more positive.
Like any new risks that businesses face, insurers will evolve their cover as new emerging risks become ever more present.
So, yes, insurers are starting to become clearer around AI exposure and what they are willing to cover when faced with new AI risks faced by businesses.
As more businesses adopt AI tools, underwriters want to understand how they’re governed, what security is in place and secure unfamiliar accumulation risks. That’s why we’re seeing specific AI wording, sub-limits and caps.
At the same time, we’re in a soft cyber insurance market for SMEs.
With a soft market, Insurer appetite is strong and competition is high (these market conditions generally favour buyers), and for well-managed SMEs, we are often able to achieve:
- Lower premiums year-on-year, on a like for like basis
- Broader, clearer policy wordings
- Improved ransomware and incident response cover
- Reduced excesses
The difference lies in how the risk is presented.
As specialist brokers, we help businesses explain their IT and Security protocols and internal policies, cyber and AI use in a way underwriters understand, challenge unnecessary restrictions and use the current market competition to find solutions that are cost and risk competitive.
So, are insurers tightening their reins?
For poorly explained or managed AI risks, perhaps.
But for businesses willing to engage and for brokers like us who have the experience, this market offers a real opportunity to improve cover, gain clarity around AI exposure and arrange insurance on a competitive basis.
If you haven’t reviewed your cyber insurance recently, especially now that AI is embedded in day-to-day operations, speak to a specialist broker. The market is moving in your favour, but only if you engage with it.
Daniel Winn is a specialist broker with Jensten’s Technology, Media and Cyber team. Daniel works with businesses and our internal teams to explain Cyber Insurance Cover and helps to arrange appropriate cyber cover for businesses.
Source: https://www.ft.com/content/12e36e02-7ff9-4a45-9544-872822fe9c97?syn-25a6b1a6=1