Cowbell launches standalone AI liability insurance for small businesses using AI agents

Cowbell is introducing a standalone AI liability policy for small and midsized businesses in the United States, according to SiliconANGLE. Cowbell AI Liability Insurance will go on sale January 1, 2027, through wholesale brokers on a non-admitted basis.

The policy covers losses tied to AI incidents, including model drift, manipulated agents, unauthorized payments and unexpected usage charges. It also covers investigations, taking affected agents offline, correcting or withdrawing unsafe output, and notifying recipients. Coverage extends to LLMjacking, in which stolen credentials or API keys are used to run AI workloads.

Third-party coverage includes defense costs, damages and settlements arising from inaccurate AI output, algorithmic discrimination or bodily injury linked to AI output. The policy can also cover regulatory proceedings and certain fines where permitted by law. Cowbell will assess applicants using factors related to AI observability, autonomy and governance.