Chaucer Group, the specialty re/insurance group, has partnered with Armilla AI, a specialist in AI liability insurance and risk assessment, to introduce Vanguard AI, a unified insurance solution developed to manage cyber, technology and AI-related liabilities within a single, structured framework.
Vanguard AI integrates Chaucer’s primary cyber and technology errors & omissions (E&O) coverage with Armilla’s standalone AI liability policy.
The arrangement establishes clear allocation mechanisms that determine how claims are handled when losses involve overlapping elements such as cyber incidents, technology service breakdowns and AI system conduct. By setting these parameters in advance, the solution aims to minimise uncertainty as businesses expand their use of artificial intelligence.
Within this coordinated model, Chaucer’s Cyber and Technology E&O policy continues to act as the principal layer of protection for breach-related cyber losses, including business interruption, ransomware attacks, system disruptions and liabilities arising from technology services.
AI-related exposures, however, are addressed separately through a standalone policy underwritten by Armilla and supported by Lloyd’s of London. This cover responds to losses stemming from AI model behaviour, such as inaccurate outputs, performance shortfalls or the actions of autonomous AI agents, in situations where no cyber event has occurred.
The framework also introduces dedicated AI aggregate limits of $25 million or more per organisation, in addition to $10 million in cyber limits. This separation is intended to safeguard traditional cyber and technology E&O capacity from being depleted by AI-driven losses. Where incidents involve a combination of cyber events, technology failures and AI system behaviour, predefined allocation rules apply, allowing claims to be apportioned according to the source of harm and reducing the likelihood of disputes during the claims process.
Beyond coverage, the structure is supported by AI model certification, risk and compliance reporting, and access to established cyber security and legal response partners, providing organisations with broader risk management support.
Piers Tuggey, Head of Cyber, Chaucer, commented: “As AI adoption accelerates, the challenge for insurers is managing the impact of emerging exposures, ensuring they do not distort coverage lines they were never designed or priced to absorb. The result of this partnership is a coordinated structure that preserves underwriting clarity while providing clients with a coherent response where risks overlap.”
Karthik Ramakrishnan, CEO and Co-Founder, Armilla AI, added: “AI liability is rapidly moving from an implicit exposure within cyber and technology policies to a risk that demands dedicated coverage. By making AI liability clear and separate within Vanguard AI, organisations avoid post-loss uncertainty about where an AI-driven failure sits. This structure enables enterprises to engage with AI confidently, knowing that cyber, technology, and AI risks are addressed transparently and in a coordinated way.”
