HSB (formerly The Hartford Steam Boiler Inspection and Insurance Company), a specialty insurer within Munich Re, rolled out a new liability product targeting legal exposure tied to artificial intelligence, aimed squarely at small and mid-sized firms that already rely on automation and data-driven tools in daily operations.
The launch reflects a shift where AI adoption moves faster than policy wording, leaving gaps insurers now need to close.
HSB is a specialty insurer, provider of inspection, risk management, and Internet of Things (IoT) technology services, and is part of Munich Re. Founded in 1866, HSB is a pioneer in engineering insurance and remains a market leader in equipment breakdown coverage
The coverage addresses losses linked to AI use that standard general liability policies often exclude, including bodily injury, property damage, and advertising-related claims tied to AI-generated content across marketing, blogs, and social platforms.
Businesses push AI into workflows to cut costs and speed up decisions, though legal exposure follows close behind, sometimes in ways firms don’t fully map out.
Timothy Zeilman, global head of product ownership at HSB, frames the issue around uncertainty, where companies adopt AI tools without clear visibility on liability exposure. He argues the product fills those gaps, giving businesses clearer protection as risks tied to automation and algorithm-driven outputs keep expanding.
All types of businesses are using AI to do things more quickly and efficiently. At the same time, the AI transformation brings new legal and financial exposures.
Timothy Zeilman, global head of product ownership at HSB
“Business owners may wonder, am I protected? AI insurance helps remove that uncertainty by filling the gaps in coverage, so businesses can stay ahead of emerging risks,” said Timothy Zeilman.
The policy responds to lawsuits where AI systems contribute to physical harm. One example involves an AI-controlled HVAC system creating floor condensation, leading to a slip-and-fall injury, which pushes liability back onto the insured.
These scenarios sound niche, though they’re becoming less rare as systems operate with limited human oversight.
Property damage sits within scope as well. If an AI chatbot generates faulty installation instructions, leading to water damage or equipment failure, the policy covers resulting claims, which addresses a growing issue where automated advice replaces human input without the same safeguards.
Legal exposure extends into content and communication risks. The coverage includes claims tied to privacy breaches, defamation, libel, and copyright infringement linked to AI-generated outputs, such as marketing material using unauthorised content or posts containing defamatory statements.
According to Beinsure analysts, these risks expand quickly as generative AI tools scale across customer-facing channels.
We think that approach speeds adoption, though uptake depends on how clearly insurers position the risk and price it in a market where loss data still looks thin.
HSB plans to integrate the coverage into partner insurers’ business policies, subject to regulatory approval, embedding it within existing distribution frameworks rather than launching it as a standalone product.
