New 2026 Insurance Exclusions and First-of-Its-Kind Federal Ruling Raise the Stakes for AI-Assisted Safety Investigations

Insurance carriers are increasingly excluding AI-related claims from general-liability policies, raising potential uninsured liability for companies using AI in workplace investigations. A federal court is also considering, for the first time, whether AI-assisted investigative work qualifies for legal privilege, creating added litigation and compliance risk. The developments narrow companies' margin for error in deploying AI for internal incident reviews.