Does Tech E&O Cover AI Hallucinations?
A hallucinated output is not automatically covered; coverage depends on whether a claim fits the policy’s insured services and terms.
A hallucination is a false or unsupported output produced by an AI system. If a customer alleges that the output caused financial harm, the dispute may be framed as an error in a covered technology product or professional service, but that is a coverage question rather than a guaranteed benefit. The Hartford’s public Tech E&O explanation discusses errors and failures in technology products and services; it does not promise coverage for every AI output. Identify whether you built the model, configured a third-party tool, or supplied advice based on its results. Ask for any AI exclusion or endorsement and confirm the policy addresses human review, disclosed model limitations, customer use, intellectual property, and contractual warranties. Report known complaints or incidents accurately when applying.
Preserve product documentation and customer-facing warnings so the insurer can evaluate what function was promised and how users were instructed.
Related Coverage
Sources
- Professional Liability – US Direct Errors and Omissions Insurance. Hiscox Inc. specimen; About this Policy / Coverage for Claims Made Against You; I.A Insuring Agreement; I.B Defense; I.C Settlement; II.A Notice of Claims; II.C Optional Extended Reporting Period; III.A, III.K, III.M, III.R, III.S Exclusions; IV.A–B Limits and Deductible; VI.O Professional Services; VI.U Wrongful Act. Accessed 2026-09-25.
- Technology Errors and Omissions Insurance. The Hartford; What Is Technology Errors and Omissions Insurance?; Coverage; Works With Contracts; Types of Companies That Need Tech E&O Insurance. Accessed 2026-09-25.
