ISO CG 40 47 Generative AI Exclusion & $25k Ransomware Sub-Limit
Carriers are aggressively attaching ISO CG 40 47 ("Exclusion — Generative Artificial Intelligence") and manuscript LLM/AI exclusions to 2026 GL and Tech E&O renewals—quietly stripping coverage for any claim "arising out of, caused by, or involving generative AI, machine learning, automated code, or algorithmic output." Simultaneously, Cyber binders that advertise a "$2,000,000 Policy Limit" on Page 1 bury a $25,000 sub-limit on Page 14 for Social Engineering, Wire Transfer Fraud, and Ransomware/Cyber Extortion.
SaaS Company Paid $215,000 Out-of-Pocket When $2M Cyber Policy Capped Social Engineering at $25k & Excluded AI (CG 40 47)
A B2B software firm holding a "$2,000,000 Cyber & Tech E&O Policy" suffered a $190,000 spoofed vendor invoice wire loss and a customer lawsuit over an AI copilot output. The carrier paid only $25,000 under a buried Social Engineering sub-limit and denied the AI suit under ISO CG 40 47.
EndorseIQ™ flags ISO CG 40 47 Generative AI exclusions, raises Social Engineering / Ransomware sub-limits to $250k–Full Limits, and removes "Failure to Maintain" forfeiture warranties.
Check Your Full Contract PDF for Cross-Section Overrides (Free 60s Scan)
Fixing one clause alone often fails when a buried definition, exhibit, or survival clause elsewhere in your Cyber, Tech E&O & AI Exclusions neutralizes your protection. Drop your PDF or Word (.docx) below for an instant, 100% anonymous cross-section audit.
“REMOVAL OF ISO CG 40 47 GENERATIVE AI EXCLUSION & FULL CYBER EXTORTION / SOCIAL ENGINEERING LIMITS: (a) ISO Endorsement CG 40 47 (and any manuscript Generative AI/LLM exclusion) is deleted in its entirety, or amended with an affirmative carve-out covering Insured’s software development, AI-assisted workflows, and customer-facing products; and
What to Say to the Cyber & Tech E&O Underwriter
"Because our engineering and operations workflows utilize modern AI tooling, we cannot accept ISO CG 40 47 or a blanket Generative AI exclusion. We also need Cyber Extortion/Ransomware restored to full policy limits and the Social Engineering / Funds Transfer Fraud sub-limit raised from $25,000 to $250,000."
Why they drafted it this way: Underwriters use ISO CG 40 47 to eliminate systemic AI copyright, hallucination, and software error exposure across their portfolio, while capping the two most frequent cyber claims (ransomware and wire-fraud phishing) at $25,000.
Mandatory Audit Checklist Points
- Strike ISO CG 40 47 / CG 35 08 Generative AI Exclusions or add an affirmative Tech E&O AI carve-out
- Verify Ransomware / Cyber Extortion is covered at 100% of full policy limits (never a $25k–$50k sub-limit)
- Increase Social Engineering, Phishing & Invoice Manipulation sub-limits from $25,000 to $250,000+
- Eliminate "Callback Verification to a Pre-Existing Phone Number" forfeiture traps on Funds Transfer Fraud
Paste Your ISO CG 40 47 Generative AI Exclusion cyber ransomware sub-limit audit Section or Upload Your Full Cyber, Tech E&O & AI Exclusions (.pdf / .docx)
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EndorseIQ™ Policy & Binder Scanner
ACTIVE ENGINE: ENDORSEIQ™ (MULTI-HOP ISO & COVERAGE GRAPH)Frequently Asked Questions
What does ISO CG 40 47 ("Exclusion — Generative Artificial Intelligence") exclude?
Filed by ISO for Commercial General Liability and Excess policies (with parallel manuscript endorsements in Tech E&O), CG 40 47 excludes bodily injury, property damage, and liability arising out of any actual or alleged use, integration, or output of generative AI—creating a massive coverage gap for any SaaS company, agency, or business using AI copilots or LLM APIs.
Why do $2,000,000 Cyber policies pay only $25,000 on most wire fraud and phishing claims?
Because standard cyber policies distinguish "Third-Party Hacking" from "Voluntary Parting / Social Engineering" (when an employee is tricked by a spoofed vendor invoice or CEO email into wiring funds) and cap Social Engineering at a tiny $10,000 to $25,000 sub-limit unless negotiated upward to $250,000.
How do I redline ISO CG 40 47 Generative AI Exclusion cyber ransomware sub-limit audit traps in my Cyber, Tech E&O & AI Exclusions anonymously without creating an account?
Upload your Cyber, Tech E&O & AI Exclusions PDF or Word (.docx) draft to ExclusionRadar.com to run the "ISO CG 40 47 Generative AI Exclusion & $25k Ransomware Sub-Limit" defense cartridge 100% anonymously—with zero account registration, zero email login, and stateless in-memory processing. EndorseIQ™ flags ISO CG 40 47 Generative AI Exclusion cyber ransomware sub-limit audit exposure (typically $75,000 – $450,000+ in sub-limited ransomware or excluded AI claims; documented unredlined loss: $215,000 in sub-limited wire fraud & excluded AI E&O defense), checks for cross-section overrides, and exports a ready-to-send Microsoft Word (.docx) Track-Changes file.
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