Insurance
Home›Insurance›Industry & Deals›Cyber insurers spotlight vendor risk, AI exclusions an…
Cyber insurers spotlight vendor risk, AI exclusions and quantum threats
Panelists at InsuranceFest 2026 said many firms underestimate third-party exposure, relying on vendor assurances and leaving coverage gaps as insurers tighten wording.
Cyber specialists highlighted vendor risk, AI-related exclusions and uncertainty tied to quantum computing as key issues shaping how cyber insurance is being underwritten, during a panel at InsuranceFest 2026 in Santa Monica on July 16, according to Insurance Business.
Panel speakers said third-party exposure remains widely overlooked because organizations often believe they have shifted cyber risk by outsourcing, but major incidents typically involve a third party that leaves a back door open. They added that while companies may perform initial due diligence, many do not extend assessment far enough into the supply chain, sometimes relying on a vendor’s SOC attestation rather than mapping contractual relationships further down.
The panel also pointed to growing uncertainty around AI-related exposures. RT Specialty’s Fitz Swain said carriers are increasingly adding AI-specific exclusions into errors and omissions coverage where businesses rely on AI-generated outputs without meaningful human oversight, including risks tied to fabricated case law described in court filings.
Speakers further warned that cyber and general liability policies can leave gaps for insureds as exclusions evolve, with USI Insurance Services’ Nadia Hoyte questioning whether broad exclusions are the right solution instead of using more tailored underwriting questions.