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Generative AI Liability Insurance in Texas

Texas Penal Code § 21.165 criminalizes specified production or distribution of nonconsensual deepfake sexual media and says a label is not a defense. A publicly accessible AI provider can assert an affirmative defense only if it requires user acknowledgment of a prohibition and takes listed technical prevention steps. Separate Texas Civil Practice and Remedies Code rules govern age verification, adult and consent checks for sources, and access to public tools creating artificial sexual material harmful to minors. 1,2

What Is Generative AI Liability?

Generative AI liability can help pay covered defense costs and losses when someone claims your AI use caused harm, including infringement or data disclosure. If you use or sell AI outputs, check how the policy fits your role and existing liability coverage. Read the national Generative AI liability guide.

What to Watch for in Texas

  • Texas defines what counts as valid permission

    Under § 21.165, consent to producing or distributing deepfake media is valid only when the depicted person knowingly and voluntarily signs a plain-language written agreement describing the media and, if applicable, the audiovisual work. The statute also says a disclaimer or AI label is not a defense to prosecution. Store permission with the specific content and work rather than relying on a checkbox that does not identify the proposed use. 1

  • An AI provider’s defense requires both terms and technical controls

    A publicly accessible AI application or software provider may raise an affirmative defense to § 21.165 prosecution only if user terms prohibit the covered deepfake and the provider takes affirmative steps such as training the system to identify prohibited media, providing reporting tools, filtering outputs before display, or filtering training data. This makes implementation evidence material: preserve policy versions, filter behavior, reports, and prevention testing for the broker and defense team. 1

  • Texas separately regulates tools for artificial sexual material involving minors

    Chapter 129B defines artificial sexual material harmful to minors as computer-generated material using an AI or other software in which an actual recognizable person appears. A public tool or application for creating that material must age-verify users unless it both prohibits the material in acknowledged terms and takes affirmative technical prevention steps. A covered tool must also ensure a source person is at least 18 and consented to use of their face and body. The Act provides a different set of defenses and duties from § 21.165. 2

Who Regulates Insurance in Texas

Texas Department of Insurance

TDI licenses agents and insurers, reviews company rate filings, and investigates complaints against insurance companies and people it regulates. Its complaint page states limits on what it can resolve, including disputes outside its regulatory authority. 3,4,5

Surplus-lines tax and stamping office

Reported tax rate: 4.85% of gross premium plus 0.04% SLTX stamping fee When Texas is the insured’s home state, the state tax is 4.85% of gross premium; absent a compact allocation agreement, a multistate policy can be taxed on its entire premium. Policies effective on or after Jan. 1, 2024 also carry a 0.04% stamping fee; SLTX invoices the broker and says the insured pays it, and the surplus-lines insurer is not covered by the Texas guaranty association. 6,7,8

Surplus Lines Stamping Office of Texas

Providers With Documented State Licenses

No provider in Spot’s research documents both a state license record and this coverage line. This does not establish that providers are unlicensed. Check the regulator’s license lookup and confirm availability with a provider when requesting a quote.

Questions to Ask Before You Buy in Texas

  1. Do your Texas-facing tools require a written agreement describing each intimate deepfake and the audiovisual work that uses it?
  2. What evidence shows the service uses each required combination of user-policy restrictions and technical prevention controls?
  3. Could a tool fall within Chapter 129B’s public creation-tool rules, and how does it verify age and consent without retaining identifying information?

Generative AI Liability in Texas: FAQ

Can a Texas AI label substitute for permission? 1

No. Section 21.165 states that an unauthorized-content disclaimer or a label identifying a depiction as inauthentic is not a defense to prosecution. 1

Does Texas give every AI provider an automatic deepfake safe harbor? 1

No. The affirmative defense in § 21.165 requires both acknowledged terms prohibiting the specified content and affirmative technological prevention steps. 1

Generative AI Liability in Other States

Other Coverage in Texas

Sources

  1. Texas Penal Code Chapter 21, including § 21.165: Unlawful Production or Distribution of Certain Sexually Explicit Media. Texas Legislature; § 21.165: deepfake definition, offense, written-consent terms, penalties, defenses, and restitution; amended 2025. Accessed 2026-09-29.
  2. Texas Civil Practice and Remedies Code Chapter 129B: Liability Related to Sexual Material Harmful to Minors. Texas Legislature; §§ 129B.001–.006, especially .002 and .0045: AI-generated harmful material definitions, age controls, source-person age and consent, enforcement. Accessed 2026-09-29.
  3. texas insurance regulator. State insurance regulator; TDI regulator page outlines licensing, financial oversight, compliance/enforcement, and rate review. Accessed 2026-09-28.
  4. How to Find a Licensed Insurance Agent or Adjuster. State insurance regulator; TDI says search by agent name or license number and links to the state license search. Accessed 2026-09-28.
  5. Get Help with an Insurance Complaint. State insurance regulator; Direct complaint page explains covered entities, exclusions and online filing; Help Line 800-252-3439. Accessed 2026-09-28.
  6. Texas Insurance Code §§225.002–225.004. Texas Legislature; §225.002 limits chapter to Texas-home-state insured; §225.004(a) 4.85%; (a-1) NRRA home-state limitation; (c) entire premium where Texas is home state and no compact agreement. Accessed 2026-09-28.
  7. Stamping Fees & Taxes. Surplus Lines Stamping Office of Texas; Current policy-date table lists 0.04% for inception 1/1/2024 and after; stamping fee invoices go to brokers; site says fee is paid by insured. Accessed 2026-09-28.
  8. Texas Surplus Lines Companies. Texas Department of Insurance; TDI says surplus-lines insurers are not licensed in Texas and its guaranty association member; eligibility/disclaimer and broker financial-responsibility details. Accessed 2026-09-28.
  9. Licenses. At-Bay; Current producer introduction and state table; At-Bay Insurance Services LLC; P&C and surplus-lines identifiers. Accessed 2026-09-21.
  10. Licenses and Carriers. Coalition; Licenses and Carriers, re-read 22 September 2026: Insurance Licenses table for Coalition Insurance Solutions, Inc., national producer number 18419475, with producer and surplus-lines numbers for all 50 states and DC including California 0L76155, Georgia 196479, Texas 2199630 and 2205589, Pennsylvania 815731 and 817452, Colorado 539028 and Wisconsin 3000108852. Insurance Carriers table naming, with NAIC numbers, Allianz Underwriters Insurance Company 36420, Arch Specialty Insurance Company 21199, Ascot Specialty Insurance Company 45055, Ascot Insurance Company 23752, Aspen Specialty Insurance Company 10717, Chaucer Insurance Company DAC, Coalition Insurance Company 29530, Fireman's Fund Indemnity Corporation 11380, Fortegra Specialty Insurance Company 16823, Lloyd's of London, MSIG Specialty Insurance USA Inc. 34886, MS Transverse Specialty Insurance Company 41807, Steadfast Insurance Company 26387, Vantage Risk Specialty Insurance Company 16275 and Zurich American Insurance Company 16535. Accessed 2026-09-22.
  11. Insurance Producer Licenses. Corgi Insurance; Current complete Insurance Producer Licenses table for Corgi Insurance Services, Inc.; 50 rows covering 49 states and DC (DC 3003091619); no New Mexico row; no NPN or as-of date shown. Accessed 2026-09-28.
  12. About Hiscox US Insurance. Hiscox; Hiscox Insurance Company Inc. NAIC 10200 as Chicago, IL domiciled insurer admitted or licensed in all 50 states and D.C.; Hiscox Inc. as general agent and Lloyd’s coverholder for Syndicates 33 and 3624; surplus-lines placements through licensed surplus-lines brokers; A.M. Best rating statement. Accessed 2026-09-16.
  13. Licenses. ERGO NEXT Insurance; Current entity-by-state license table reopened 28 September 2026: 50 rows under Next First Insurance Agency, Inc., including Washington, DC; New York rows instead list Next Insurance Services PC-1423070 and AP Intego BR-1198885. Accessed 2026-09-28.
  14. About Risklytics. Risklytics; What we do; Who we insure; Licensing; Agency licenses table dated 2026-09-10. Accessed 2026-09-16.
  15. Insurance Licenses by State. TechInsurance; Current state table; identifies TechInsurance as a division of Specialty Program Group LLC d/b/a SPG Insurance Solutions; lists DC 3000041536 and labels Rhode Island “Individual licenses,” without an agency license number. Accessed 2026-09-28.
  16. Licenses. Vouch; Effective 16 January 2025: Vouch Specialty Insurance Services, LLC, NPN 19926463; P&C table (50 states and DC); surplus-lines table includes Idaho 870820; footnote says Georgia and Idaho do not issue agency-level surplus-lines licenses; Idaho retained as producer-only due to conflict. Accessed 2026-09-15.

Updated .

This guide is informational and does not determine whether a policy is available or meets your needs. Editorial policy. To suggest a correction, contact Spot with a supporting source.

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