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AI insurance
A UK AI company selling to US clients needs insurance whose jurisdiction clause covers claims brought in US courts, because UK policies often exclude USA and Canada claims. US litigation is costly to defend and state AI laws keep changing, so a gap in cover can be expensive.
Part of: AI insurance UK
In short
Many UK professional indemnity and liability policies cover claims brought in the UK, or worldwide excluding the USA and Canada. For AI firms with US clients, a US claim can fall outside cover unless the jurisdiction clause is extended. US exposure is different because each side usually pays its own legal fees, discovery is wide, class actions are common, and states such as Colorado, Texas and California have passed AI laws. Insurers ask for your USA and Canada turnover to assess this. US cover can be arranged, subject to underwriting and the policy terms.
Three things make US claims costlier.
In Mobley v Workday, Inc. (N.D. Cal., No. 3:23-cv-00770), a federal court in May 2025 granted preliminary certification of a collective action under the Age Discrimination in Employment Act over alleged bias in an HR vendor's AI screening tools. Those are allegations, not findings. Regulators act too: in February 2025 the Federal Trade Commission finalised an order against DoNotPay over its "AI lawyer" claims, with $193,000 in monetary relief.
There is no single federal AI statute; state laws fill the gap and keep moving.
| Law | Status at October 2026 |
|---|---|
| Colorado SB 24-205 (2024) | Start date moved from 1 February 2026 to 30 June 2026 by SB25B-004. An AI developer challenged it in federal court in April 2026, the Department of Justice intervened, and enforcement was paused by an agreed court order. |
| Colorado SB 26-189 (2026) | Signed May 2026. Repeals and re-enacts the 2024 framework as a narrower, notice-based law on automated decision-making technology, in force from 1 January 2027. Rulemaking is under way. |
| Texas HB 149 | In force from 1 January 2026. Enforced by the Texas Attorney General, with no private right of action, a 60-day cure period and penalties up to $200,000 per uncurable violation. |
| California | SB 53 signed 29 September 2025 for frontier model developers; further AI bills signed in September 2026, including on automated decision systems in employment. |
At federal level, Executive Order 14365 (11 December 2025) directed the Attorney General to set up an AI Litigation Task Force to challenge state AI laws and sought a national framework pre-empting conflicting ones. The order does not itself pre-empt state law. On 20 March 2026 the White House published a national AI legislative framework calling on Congress to act, and in October 2026 pre-emption proposals were still being debated, not enacted.
So plan on state laws applying. Whether a policy responds to a regulator's investigation, or a penalty is insurable, depends on the wording and applicable law; many policies exclude fines and penalties.
The Chartered Institute of Arbitrators notes that UK-written professional indemnity is usually "United Kingdom Only" or "Worldwide excluding the USA and Canada".
| Clause | What it controls | US point to check |
|---|---|---|
| Territorial limits | Where the insured work is done | UK-based work for a US client is usually inside a worldwide territory |
| Jurisdiction | Which countries' courts the policy responds to | "Excluding USA and Canada" can remove cover for a claim filed in a US court, wherever you did the work |
| Applicable law (if present) | The law your liability is decided under | A claim under US law may be caught even if heard elsewhere |
The clause governing disputes between you and your insurer is separate and does not extend cover to US claims.
Illustrative: a UK consultancy with a "worldwide excluding USA and Canada" policy builds an AI triage tool for a Texas client. The client is sued and joins the consultancy into the Texas case. The jurisdiction clause, not the territory, decides. More on territorial and jurisdiction limits.
Section 5 of the Protection of Trading Interests Act 1980 stops UK courts enforcing overseas judgments for multiple damages, such as treble damages. It does not stop a US judgment or protect US assets.
"US cover" usually means the jurisdiction clause is extended to include the USA and Canada, subject to the policy terms. US claims are often treated differently, for example:
Each cover option has its own US question: professional indemnity for financial loss from your AI work, product and public liability for injury or damage from AI-enabled products, and IP infringement for copyright claims. If you deploy AI agents for US users, check where each loss would fall. A US subsidiary or US-based staff may also need a locally issued policy.
Section 3 of the Insurance Act 2015 requires a fair presentation of the risk, and a circumstance is material if it would influence the judgement of a prudent insurer (section 7(3)). USA and Canada turnover is the simplest measure of US exposure, so insurers ask for it separately. Also tell them which states your clients and users are in, whether contracts use US law or courts, whether your AI is used in hiring, lending, housing or healthcare decisions, and about any US office or staff.
If the insurer would have charged more had it known, it may reduce a claim proportionately (Schedule 1, paragraph 6). See the fair presentation duty and affirmative versus silent AI cover.
Before signing a US client's paper, check:
See insurance requirements in technology contracts.
Apex has an AI insurance scheme with an insurer that names your specific AI work in the policy as insured activity, rather than leaving it to a generic business description. You choose from professional indemnity, cyber, product and public liability, and IP infringement cover, so several AI exposures can sit in one policy. Cover for US exposure is available, subject to the insurer's underwriting and the policy terms. To quote we need a precise description of your AI work, your address, your turnover including how much comes from the USA and Canada, and the limit of indemnity you want; you can start an AI insurance quote online in a few minutes. See AI insurance in the UK or the AI insurance definition.
See also: AI clauses and indemnities in contracts · Are AI regulatory fines insurable?
Not necessarily. Many UK policies exclude claims brought in the USA and Canada. Check the jurisdiction clause, not just the territorial limits. If a US client could sue you in a US court, you usually need the jurisdiction extended, subject to the insurer's underwriting and the policy terms.
Not in its original form. The 2024 Act was delayed to 30 June 2026 and enforcement was paused during federal litigation. SB 26-189, signed in May 2026, replaces it with a narrower, notice-based law on automated decision-making technology from 1 January 2027.
Not as at October 2026. A December 2025 executive order ordered a Justice Department task force to challenge state AI laws, but it does not itself pre-empt them. Congress has debated pre-emption proposals without passing a general federal AI law.
It usually means the policy will not respond to claims brought in US or Canadian courts, even if you did all the work in the UK. Some wordings also exclude US judgments enforced elsewhere. Check how the jurisdiction, territory and applicable law clauses interact.
It helps but does not remove the risk. Your client's customers, staff or regulators are not bound by your contract and may sue in a US court. Tell the insurer about US clients and end users so the jurisdiction clause matches how you trade.
Tell us what your AI work is, where you are based, your turnover and the limit you need. It takes a few minutes online, and a broker will come back to you with options. Or call 0117 325 0027.
Start an AI insurance quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information, not advice on your individual circumstances, and it does not guarantee that cover will be available or on what terms.
