My renewal notice arrived, and my jaw hit the desk. My premium jumped from $600 to $950—a 58% increase. I haven’t filed a claim. I haven’t changed my revenue. I called my broker, demanding an explanation. The answer? “The AI Adjustment.”
Key Takeaways
- AI = High Risk: Insurers view Generative AI as a “Copyright Lawsuit Factory.” Even if you don’t use AI, the industry risk pool has become toxic.
- Inflation: Defense costs (lawyers) are charging $900/hr in 2026. Premiums must rise to pay them.
- Social Inflation: Juries are awarding massive payouts (“Nuclear Verdicts”) against companies. This trickles down to freelancers.
- Tech Complexity: Websites are harder to secure. Cyber claims are bundled into E&O loss ratios.
The “Why”: The Actuarial Correction
The Trap: You are paying for the sins of others.
In 2024-2025, thousands of lawsuits were filed regarding AI copyright infringement and deepfakes. Insurers paid out millions in defense costs.
Now, in 2026, actuary tables have adjusted. The “Graphic Design” class code is no longer considered “Low Risk.” It is now “Medium Risk” due to IP volatility.
Carriers are also adding “AI Sub-limits”, forcing you to buy extra endorsements to get full coverage, effectively raising the price.
The Investigation: I Interviewed Underwriters
I spoke to underwriters at 3 firms off the record.
1. The “Big Data” Carrier
- Insight: “We saw a 400% increase in IP claims against designers in 2025. We had to raise rates or stop writing the business.”
2. The Niche Carrier
- Insight: “We are not raising rates for designers who sign a ‘No AI’ warranty. If you prove you create manually, we give a discount.”
3. The Budget Carrier
- Insight: “We are just increasing deductibles. Instead of raising the premium, your deductible is now $2,500 instead of $500.” (Check your renewal carefully!)
[IMAGE: Chart showing E&O Premium trends 2022-2026]
Comparison Table: 2026 Price Strategies
| Strategy | Impact | What to do |
| Premium Hike | Pay more | Shop around |
| Deductible Hike | Higher risk | Save an emergency fund |
| AI Exclusion | Coverage gap | Buy the endorsement |
Step-by-Step Action Plan
- Shop Every Year: Loyalty doesn’t pay in 2026. Quote 3 carriers every renewal.
- Ask for “Manual Design” Discounts: Ask your agent if there is a credit for not using AI tools.
- Check the Deductible: If the price stayed the same, did the deductible double?
- Bundle: Combine Cyber and E&O to try and get a package discount.
FAQ
Will rates go down?
Unlikely. Legal costs never go down.
Can I lower my limit to save money?
Risky. A $1M lawsuit costs the same to defend. Dropping to $500k saves little premium but exposes you to bankruptcy.
Why is Web Design more expensive than Print?
ADA lawsuits and Cyber risks make Web Design a higher risk class.