AI Use and Cyber Insurance: What to Review Before Renewal

It’s Cybersecurity Awareness Month. In this post, we’re covering a combination of hot topics in the business world – AI, cybersecurity and insurance.

Artificial intelligence is becoming part of everyday business operations. From drafting emails and analyzing data to automating workflows, AI tools offer opportunities to improve productivity. But as adoption grows, so do cybersecurity risks that businesses may not be fully prepared to manage.

One important consideration is how AI use could affect cyber insurance coverage and renewal requirements.

While insurance for AI-related risks is still an evolving area, businesses should understand how their use of AI intersects with existing cybersecurity protections. Even if your insurance provider isn’t asking specific questions about AI today, that could change.

The good news? Businesses can take steps now to strengthen their cybersecurity posture and prepare for potential changes.

How AI Is Changing Cybersecurity Risk

AI offers significant business benefits, but it also introduces new security challenges.

Employees may use AI platforms without company approval, potentially exposing confidential information. Cybercriminals are also using AI to create more convincing phishing emails, impersonate executives and develop sophisticated attacks.

According to IBM’s 2026 Cost of a Data Breach Report, one in four malicious breaches involved AI-enabled attacks, a 56% increase over the previous year. These incidents cost organizations an average of $6 million, compared with the global breach average of $4.99 million.

These findings reinforce an important point: AI-related cybersecurity risks are no longer hypothetical.

Another concern is shadow AI, which occurs when employees use AI applications without their organization’s knowledge or approval.

IBM’s 2025 research found that 63% of breached organizations lacked an AI governance policy or were still developing one. Organizations with high levels of shadow AI experienced average breach costs $670,000 higher than those with little or no shadow AI.

For business leaders, these statistics highlight why AI adoption should be accompanied by appropriate cybersecurity safeguards.

Could AI Use Affect Your Cyber Insurance Coverage?

Cyber insurance helps businesses manage certain financial consequences of cybersecurity incidents. However, coverage depends on policy language, exclusions, underwriting requirements and the circumstances of a claim.

As AI becomes more widely adopted, insurers may increasingly consider how businesses manage AI-related cybersecurity exposures. For example, insurance providers could ask whether organizations have policies governing employee AI use, controls protecting sensitive information or procedures for responding to AI-related security incidents.

This does not mean every insurer currently requires AI-specific security measures or that using AI automatically affects coverage. Requirements vary, and businesses should consult their insurance agents or brokers to understand their policies.

The bigger concern is whether your organization’s cybersecurity practices are keeping pace with the technologies employees are using.

As Atlas discussed in our blog post Cybersecurity Insurance: Are You Meeting Your Policy Requirements?, maintaining appropriate security controls and understanding policy obligations are essential parts of cybersecurity readiness.

What Businesses Should Review Before Cyber Insurance Renewal

Whether you’re evaluating insurance for AI-related risks or renewing an existing cyber insurance policy, several cybersecurity considerations deserve attention.

1. Understand How Employees Are Using AI

Do you know which AI tools employees use and what information they share?

Unapproved applications can create risks involving customer records, financial information and proprietary business data.

Start by identifying AI tools across your organization and establishing clear guidelines for acceptable use.

2. Review Your Cybersecurity Controls

Security fundamentals remain important, regardless of how AI changes the threat landscape.

Businesses should evaluate protections such as multifactor authentication, endpoint detection and response, access controls, data protection and employee security awareness training.

These safeguards can help reduce exposure to both traditional cyberattacks and emerging AI-related threats.

3. Establish an AI Usage Policy

An AI policy should explain which tools employees may use, what information they can share and who is responsible for overseeing AI-related risks.

The National Institute of Standards and Technology’s AI Risk Management Framework provides guidance for organizations developing responsible AI risk management practices.

A documented policy also helps demonstrate that AI adoption is being managed intentionally rather than left to individual employees.

4. Update Your Incident Response Plan

Would your organization know how to respond if an employee accidentally exposed confidential information through an AI platform?

Incident response plans should address emerging threats, including AI-related data exposure, impersonation attempts and compromised applications.

Regular reviews and testing help ensure employees understand their responsibilities before an incident occurs.

5. Coordinate With Your Insurance Professional

Before renewal, ask your insurance agent or broker whether your policy addresses AI-related incidents, what exclusions may apply and whether underwriting requirements have changed.

Your IT partner can help assess and document cybersecurity controls, while your insurance professional can explain coverage terms and obligations.

How Atlas Helps Businesses Prepare

At Atlas Professional Services, we believe businesses shouldn’t have to choose between embracing AI and maintaining strong cybersecurity.

Our team helps organizations evaluate technology risks, implement appropriate safeguards and build cybersecurity practices that support long-term business resilience.

Through our AI consulting and managed services, Atlas can assist with AI security assessments, acceptable use policies, data protection, access controls and ongoing security management.

Our cybersecurity and compliance services can also help businesses evaluate existing controls, address vulnerabilities and prepare documentation relevant to insurance renewal discussions.

As we explored in our post Demystifying AI: Turning Hype Into Practical Solutions for Businesses, successful AI adoption starts with understanding how technology fits your business needs.

Atlas is not an insurance agency or provider and does not offer insurance coverage or insurance advice. Our role is to help businesses strengthen the cybersecurity practices that may influence insurance eligibility, underwriting considerations and future renewal expectations.

Prepare Today for Tomorrow’s Cybersecurity Expectations

AI is changing how businesses operate, and cybersecurity expectations will continue to evolve alongside it.

While the future of insurance for AI-related risks is still developing, organizations don’t need to wait for new insurance requirements to take action. Understanding AI usage, strengthening security controls and maintaining clear policies can help businesses reduce risk and approach renewal discussions better prepared.

Is your business prepared for the cybersecurity risks associated with AI? Atlas Professional Services can help you assess vulnerabilities, strengthen safeguards and build a more secure foundation for AI adoption. Contact us to learn how we can help your business prepare for what’s next.