CG 40 47: The ISO Generative AI Exclusion Explained

By Joel R. Singh · Last verified: 2026-07-06 · How we verify

What does CG 40 47 exclude?

CG 40 47 is issued by Verisk (the parent of ISO, which sets standard insurance policy language in the US). The endorsement attaches to commercial general liability (CGL) policies and removes three categories of coverage when the triggering event involves generative AI: bodily injury, property damage, and personal and advertising injury. In practice, this means a CGL policy with this endorsement will not pay a claim if a customer alleges they were harmed by an AI-generated output your business produced, if AI-written marketing content defames a third party and triggers an advertising injury claim, or if an AI tool your employees used contributes to physical harm. The scope is not limited to products you sell; it covers your own business operations. Verisk rolled the endorsement out as an ISO standard form for carrier adoption effective January 1, 2026. Source: Independent Agent, verified 2026-07-04.

Who does CG 40 47 apply to?

The exclusion applies to any policyholder whose carrier has adopted CG 40 47 and attached it to their CGL renewal. Adoption is not universal: it varies by carrier and by state, because insurance endorsements require regulatory approval in each jurisdiction. The businesses at highest risk are those that use generative AI in customer-facing content (blog posts, social media, marketing copy), in operational decisions that could result in customer harm, or as part of products or services delivered to third parties. A business that does not use AI at all is unaffected. A business that uses AI only for internal workflows with no third-party exposure faces lower risk than one whose AI-generated outputs go directly to consumers. The endorsement does not distinguish between AI vendors: using an off-the-shelf tool or building a custom model both fall within scope if the output causes the covered harm.

How do I check my policy for CG 40 47?

The most reliable method is to request the full endorsement schedule from your broker before your renewal takes effect. Every policy has a declarations page that lists the endorsements attached; CG 40 47 will appear there by form number if your carrier has adopted it. Do not rely on a policy summary or a carrier's verbal assurance: summaries often omit endorsement detail, and agents may not be aware of every form attached at renewal. If you already have a bound policy, ask your broker for the complete forms list and look for CG 40 47 in it. If you find it, ask for the full text of the endorsement so you can read the exact exclusion language. A related endorsement, CG 35 08, covers the same AI activities under the products and completed operations part of your CGL; check for both form numbers.

What should I ask my broker?

Start with a direct question: is CG 40 47 attached to my current policy or my upcoming renewal? If yes, ask which AI activities in your specific business operations fall within the excluded scope. Then ask whether your carrier offers an affirmative AI endorsement that restores the coverage removed by CG 40 47, and at what additional premium. If no buy-back is available, ask about standalone AI liability products; the carrier comparison table on this site tracks every US product we have verified. Also ask whether CG 35 08 is attached, since it is the products-and-completed-operations counterpart and would affect businesses that ship AI-enabled goods or completed services. Finally, ask what AI governance documentation (usage policies, model inventories, incident response plans) your carrier is starting to require and whether producing it would affect your eligibility or pricing.

What coverage gaps does CG 40 47 create?

Before CG 40 47, a standard CGL policy would respond to many AI-related claims the same way it would to any content or operational harm: advertising injury covered defamatory marketing content regardless of how it was written, and bodily injury covered operational harms regardless of what tool contributed. CG 40 47 carves out the AI-origin subset of those same harms. The gap is most acute for businesses without standalone AI liability coverage, performance guarantee coverage, or a tech errors-and-omissions policy that affirmatively includes AI. The standalone AI liability market is small (as of mid-2026, fewer than a dozen verified products exist in the US) and concentrated in surplus lines backed by Lloyd's and Munich Re. Most are sold to businesses above a revenue floor that excludes the smallest firms. The HSB AI Liability product is the first specifically designed for small and mid-sized businesses and is delivered through partner carriers; see the carrier comparison for details.

Last verified: 2026-07-06. Source links checked on that date. Report an error.