Specialty re/insurance group Chaucer Group has partnered with Artificial Intelligence liability insurance and risk assessment specialist Armilla AI to launch Vanguard AI, a unified insurance solution designed to manage cyber, technology and AI-related liabilities within a single structured framework.
Vanguard AI combines Chaucer’s primary cyber and technical errors and omissions (E&O) coverage with Armilla’s independent AI liability policy.
The arrangement establishes a clear allocation mechanism that determines how claims will be handled when losses involve overlapping factors such as cyber incidents, technical service failures and the behavior of artificial intelligence systems. By setting these parameters upfront, the solution is designed to minimize uncertainty as businesses expand their use of AI.
Within this coordinated model, Chaucer’s cyber and technical E&O policies continue to serve as the primary layer of protection for breach-related cyber losses, including liability arising from business interruption, ransomware attacks, system outages and technical services.
However, risks related to AI are addressed separately through separate policies underwritten by Armilla and backed by Lloyd’s of London. This coverage covers losses caused by the behavior of AI models in the absence of a cyber incident, such as inaccurate output, insufficient performance, or the behavior of autonomous AI agents.
The framework also introduces a total dedicated AI limit of $25 million or more per organization, in addition to a network limit of $10 million. The purpose of this separation is to protect traditional cyber and technology E&O capabilities from being exhausted by AI-driven losses. If the incident involves a combination of cyber incidents, technical failures and AI system behavior, predefined allocation rules apply, allowing claims to be allocated based on the source of damage and reducing the likelihood of disputes during the claims process.
In addition to coverage, the structure is supported by AI model certification, risk and compliance reporting, and access to established cybersecurity and legal response partners to provide organizations with broader risk management support.
Piers Tuggey, Head of Network at Chaucer, commented: “As the adoption of AI accelerates, the challenge for insurers is to manage the impact of emerging risks and ensure they do not distort coverage they were never designed or priced for. The result of this partnership is a coordinated structure that maintains clarity in underwriting while providing customers with a consistent response where risks overlap.”
Karthik Ramakrishnan, CEO and co-founder of Armilla AI, added: “AI liability is rapidly moving from an implicit exposure in cyber and technology policies to a risk requiring dedicated coverage. By clarifying and differentiating AI liability in Vanguard AI, organizations can avoid the uncertainty of losses after an AI-driven failure occurs. This structure enables enterprises to engage in AI with confidence, knowing that cyber, technology and AI risks are all addressed in a transparent and coordinated manner.”
