UK Trends and Developments Contributed by: Daniel Robin and Chloe Franklin, SDV Fenchurch
Artificial intelligence: the next major insurance frontier Artificial intelligence has rapidly transitioned from an emerging technology to a core component of modern business operations. Organisations across numerous sectors now use AI-powered tools to analyse data, automate decision-making, generate written content, develop software and support customer-facing ser- vices. The pace of adoption has significantly outstripped the development of legal and regulatory frameworks designed to govern such technologies. This mismatch is creating uncertainty as businesses, regulators and insurers seek to determine how existing legal princi- ples apply to AI-related losses. Several categories of risk are already emerging. Busi- nesses may face allegations arising from inaccurate AI-generated advice, discriminatory automated deci- sion-making, misuse of personal data, intellectual property infringement or failures in governance and oversight. Depending upon the circumstances, such liabilities may trigger professional indemnity, cyber, directors’ and officers’ (D&O) or technology errors and omissions policies. The legal environment is already beginning to evolve. In Getty Images ( US ) Inc v Stability AI Ltd , the High Court is considering allegations relating to the use of copyrighted material in the training of generative AI systems. The litigation raises fundamental questions regarding ownership, data use and intellectual proper- ty rights in AI development. Similar claims have been brought internationally by authors, publishers and media organisations against AI developers. There have been a number of cases reminding profes- sionals that while AI can be used as a tool to assist with their professional services, a professional cannot delegate its ultimate responsibilities to AI and remains responsible for any false or misleading information produced by AI. Data protection concerns are also becoming increas- ingly prominent. The Information Commissioner’s Office has repeatedly highlighted the need for organi- sations deploying AI systems to comply with UK data
The Key Challenges in Today’s Insurance Landscape Introduction
The UK insurance market is entering a period charac- terised by the convergence of technological change, environmental pressures, geopolitical instability and evolving liability exposures. While traditional insurance disputes concerning policy interpretation, disclosure and compliance with policy terms remain prevalent, many of the most significant risks facing businesses today arise from issues that were either unforeseen or insufficiently developed when many existing insurance products were designed. This presents challenges for insurers and policyhold- ers alike. Businesses are increasingly exposed to risks that do not fit neatly within established categories of insurance cover, while insurers must assess and price liabilities that are often difficult to quantify and whose long-term implications remain uncertain. Recent years have demonstrated that emerging risks frequently become the source of major cover- age disputes. The COVID-19 pandemic gave rise to unprecedented business interruption litigation. Rus- sia’s invasion of Ukraine generated some of the larg- est insurance claims ever pursued before the English courts. Meanwhile, developments in artificial intel- ligence, climate litigation and environmental liability are creating entirely new areas of potential exposure. For businesses operating in the United Kingdom, understanding these developments is essential. Insur- ance continues to be one of the most important tools available to manage commercial risk, yet the effec- tiveness of that protection increasingly depends upon anticipating how emerging threats may interact with existing policy wordings. This article examines the key trends currently shap- ing the insurance landscape, focusing on artificial intelligence, climate change, the Building Safety Act, PFAS contamination, cyber warfare, systemic busi- ness interruption risks and geopolitical instability.
260 I NSURANCE L I T IGATI O N 2026
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