By Steven Barge-Siever, Esq. If you’re a tech company with fewer than 250 employees, there’s a good chance AllDigital is on your insurance program. And if you’re in California, be ready for a nonrenewal letter. Over the past few weeks, we’ve seen something many brokers and clients didn’t anticipate: formal non-renewal notices on D&O and EPL policies - often with no warning, no negotiation, and very little explanation. The catalyst? AXIS has pulled its admitted management liability capacity from AllDigital Specialty in California, citing deteriorating small business EPL conditions. But this change came quietly. We've found no public announcement, no statement from the carrier , and only one article (behind a paywall) acknowledging what happened. And it's not limited to EPL. What Do the Axis/AllDigital California Nonrenewals Actually Say? Despite EPL being the catalyst, here’s the AllDigital non-renewal language some clients are receiving: “We will not renew this policy when it expires. Your insurance will cease on the Expiration Date shown above.” “The reason for nonrenewal is that the risk exposures have materially changed and do not meet current underwriting criteria.” But the companies I’ve spoken with haven’t materially changed. The risk hasn’t changed. Insurer appetite did. Clients Want Reliability One of the most durable lessons I took from placing large, complex Fortune 500 programs at Aon and WTW: You don’t just compare pricing - you evaluate ability to pay. To do this you determine whether a carrier will: 1. cover a large loss ( policy language ), and 2. be able to absorb large losses and still be there when it matters ( financial stability ). Because what good is insurance that doesn’t insure? Every few years, a new offering - most often, via MGA - enters the market. They lead with pricing. They flood into specific sectors, win business through efficiency and discounting, and then, inevitably, face a hard decision: raise rates significantly or exit entirely . That’s what we’re seeing now. Carriers that priced small business and tech D&O/EPL at ultra-low levels are now walking away. Not tapering. Not renegotiating. Leaving. Sometimes the Discount Is  Worth It There is a valid counterargument to stability. Even Fortune 500 companies sometimes take a discount knowing it may not last. For most companies, two or three years of deeply discounted pricing is a simple win. It’s a form of opportunistic arbitrage. And that logic holds up - as long as the client understands the risk and the broker has a contingency plan . The problem is when clients take that risk unwittingly , based solely on quote comparisons, without any real awareness of downside exposure. Again, the ability to 1. cover a large loss ( policy language ), and 2. absorb large losses and still be there when it matters ( financial stability ). That’s where the broker’s job changes. No just to eliminate this year's risk - but to understand the tradeoffs and, most importantly, to have a contingency plan. The Math Behind the Moment Over the years, I've seen AllDigital quotes priced 30 – 50% below the rest of the market - specifically on California tech risk. It looked great. It was also somewhat questionable as I led the Fintech Practice at Vouch (an insurance company that competes with AllDigital). But the math is tough to actuarially justify : One D&O or EPL claim  can easily cost an insurer $1M. A $2,000 annual policy premium would require: $1,000,000 ÷ $2,000 = 500 clean policies to cover a single loss And that excludes admin costs, commissions, taxes, and reinsurance - making the real number closer to 750 - 1,000 clean policies to cover a loss. Perhaps even more importantly, losses typically don’t appear in isolation - they occur in clusters, triggered by macro shifts like layoffs, regulation, and employment volatility. When the claims hit, carriers without years of reserves face forced exits . The Risk of Over-Reliance We’re now seeing the fallout from brokers (and clients) relying too heavily on a single underwriting channel. And this problem is even more acute when considering the complexities of D2C (broker/underwriter) MGAs - these models fundamentally rely on a single underwriting channel (and reinsurance that is outside of their control). When that channel shuts off, your broker needs to have a sufficient bench of insurance carriers as backup - and experienced brokers to market the accounts with diligence. We’ve had clients come to us asking two questions: Can you help replace this coverage? What actually happened? The answers: 1. Yes - we access all insurance companies without playing favorite. 2. A program built to scale distribution - not sustain volatility. Side Note: The MGA Business Model Mirrors the VC Playbook Many/most clients weren’t buying AXIS directly. They were buying coverage through an MGA (AllDigital Specialty ) that built a platform for rapid D&O and EPL issuance. And while MGAs are a valuable part of the market, they are distribution models, not balance sheets . They don’t underwrite volatility. They don’t hold reserves. And they don’t always price for longevity. The model is eerily similar to early-stage startups: grow fast, scale revenue, hit distribution numbers. But insurance doesn’t pivot well . Especially not admitted business governed by rate filings and regulatory oversight. The Takeaway There is nothing revolutionary or unprecedented happing with this year's Axis/AllDigital nonrenewals. And this isn’t about traditional vs. insurtech. It’s about the fundamentals of insurance economics : Risk must be priced to survive the cycle. Reserves matter. Capacity is not infinite. Cheap premiums feel efficient until they disappear. And when carriers leave the market, they don’t send press releases. They send non-renewal notices . If you get a notice of non-renewal (they will come 90 days before your policy expires) reach out. At URM, we build every program assuming this can happen. If your EPL or D&O coverage has been disrupted, or you want a second set of eyes on what’s next, we’re ready to step in. If you want to understand your risk, we have analytical tools geared for tech. Upward Risk Management LLC When expertise is non-negotiable. By Steven Barge-Siever, Esq. URM | Founder & CEO steve@upwardriskmanagement.com www.upwardriskmanagement.com

Why most insurtechs still aren’t ready for the enterprise insurance market. By Steven Barge-Siever, Esq. In insurance, it all sounds the same at first. A policy is a policy. A broker is a broker. Property & Casualty (P&C) covers everything, right? But once you're on the inside - especially at the enterprise risk level - you see things for what they are: Not all risk is created equal. Not all coverage is “commercial.” And not all brokers are in the same business. Yet many insurtechs continue to treat billion-dollar companies and sidewalk cafes like they're buying the same product. And this is why my professional colleagues see no threat from insurtechs. If you want to build real tech for real risk, you need to start with the fundamentals: Understand the risk. Learn the language. Respect the complexity. Not All Insurance Is Commercial. Not All Brokers Are Equal. At the small business level, insurance is mostly standardized. A general liability policy for a boutique or barbershop can be quoted online in minutes. It works — for commoditized risk. But once your business has: A board of directors Venture investors Sensitive data or AI decisioning Multi-jurisdictional employees Enterprise customers with indemnity clauses …you’re in another league. You’re not buying coverage. You’re protecting capital, leadership, and reputation.This isn’t “commercial insurance.” This is corporate risk. Visual Contrast: BOP vs. $15M D&O Tower Barbershop BOP Series B Fintech D&O Tower $500/year premium $15,000,000 in policy limits Covers slip-and-fall Covers regulatory subpoenas, securities claims Standard ISO wording Custom manuscript language Retail quoting platform Broker-led negotiation + legal review Application: 1 page Application: financials, cap table, governance Low-impact litigation Board/investor-level personal liability One isn’t better than the other. But they are not the same product. And yet, most insurtechs treat them as though they are. Where Language Collapses, So Does Credibility We see it all the time: platforms built for scale that collapse everything into the P&C or “commercial” bucket. Nuance disappears. Risk is flattened. Vocabulary collapses. And it’s not just a branding issue. It’s a functional problem. “When I hear a founder say they’re automating the ‘entire commercial insurance market,’ I know they haven’t spoken to a single wholesale broker.” - Managing Director, National Brokerage A Real Breakdown: When Generic Coverage Meets Complex Claims I worked with a Series B Fintech company whose previous broker bundled Cyber and Tech E&O into a generic “commercial package.” Sounds good, feels efficient. The problem? The policy's Definition of Professional Services to excludes financial services. My first thought - their broker is out of their depth. That’s what happens when you treat real risk like a template. Language Is  the Product In this world, language is risk . Policies are legal contracts. Claims are legal disputes. Words determine whether you’re covered or denied. If your AI can’t correlate: Company specific operations  with risks and related coverage requirements, Professional liability vs. Lender Liability vs. Cyber vs. Media Liability What a company needs to consider in regulatory coverage …then you’re not just behind. You’re dangerous. Where Upward Risk Management and Undr AI Come In At Upward Risk Management , we serve complex clients. We’re not a volume shop. We’re the firm that gets called when things are complicated. We work with: Growth-stage companies with board-level liability Fintech and AI companies navigating novel claims VCs and GCs who want audit-ready, defense-tested coverage Brokers seeking expert partners for E&O, D&O, Cyber, and EPL That’s why we built Undr AI  - to do what generic insurtech tools can’t. It doesn’t just extract terms from policies. It interprets them. Understands them. Flags risks before they become claims. A Final Word for Founders Building in Insurance If you're building in this space, ask yourself the following, and feel free to reach out to us . Could a top broker rely on your platform without rewriting the outputs? Would a seasoned underwriter trust it to explain a coverage tower? What is it designed to handle - a $500 BOP or a $15M D&O Side A layer? If not - slow down . Talk to brokers. Learn from litigated claims. Build with humility, not just speed. Because the insurance industry doesn’t need faster clicks — it needs smarter systems.And it won’t trust you unless you earn it. The Bottom Line When the risk is small, any broker - or bot - might do. But when it gets complicated? You need someone who speaks the language, understands the liability, and sees around corners. That’s what we do at Upward Risk Management . And that’s why we built Undr AI . Upward Risk Management When expertise is nonnegotiable.

Venture Capital Insurance Hidden Exposures When startups offer equity as compensation, they are entering securities territory.  As valuations rise, and especially when companies face downturns, misrepresentation claims tied to employee equity are emerging as a high-risk litigation trend . These lawsuits don’t just impact the company - they will name board members , including VCs with active roles or board seats .  Without proper risk management and tailored D&O coverage, these exposures are personal. The New Litigation Trends that Impact Venture Capital Insurance As valuations climb and liquidity timelines stretch, employees begin scrutinizing the value of their equity. That scrutiny turns to legal action when: Companies go through down rounds, distressed M&A, or wind-downs; Equity is diluted, repriced, or rendered worthless; And internal messaging around “upside” starts to look more like misrepresentation. We’re seeing a clear trend: securities-based lawsuits brought by former employees  who claim they were misled about the value of their options or RSUs. And these claims don’t stop at the company - they often name individual board members , including VCs with active oversight or compensation roles. The Legal Theory: Misrepresentation, Fraud, and Fiduciary Breach Employees granted equity are not accredited investors. Yet they are often handed offer letters, internal decks, or verbal assurances that portray stock options as a sure path to wealth - without any mention of: Dilution mechanics Liquidation preferences or waterfall structures The speculative nature of private company equity This disconnect creates fertile ground for securities fraud and misrepresentation claims , especially under state Blue Sky laws and federal Rule 10b-5. These claims argue that companies and their leadership failed to disclose material risks , effectively treating employees as sophisticated investors - while withholding the very information those investors would have needed to make an informed decision. Why This Risk Is Personal - Especially for VCs These lawsuits aren’t just a corporate liability. They are increasingly naming individual directors , especially venture partners who: Sit on compensation committees Approve equity grants Participate in exit or financing discussions Oversee internal communications to employees In many cases, plaintiffs argue that these directors had a duty to ensure fair and transparent disclosures , especially when they encouraged or approved messaging that promoted equity upside. D&O Insurance: Often Inadequate, Sometimes Useless Most D&O policies don’t automatically cover  securities claims tied to employee equity. And even when they do, coverage may be lost due to: Fraud exclusions  or prior knowledge clauses Employment-related exclusions  if the claim is tied to hiring or compensation Narrow definitions  of what constitutes a “claim” or “wrongful act” Worse, these policies are often never reviewed  for the unique blend of securities, employment, and board governance exposures that arise in these cases. The Real-World Impact: Reputational and Financial For VC firms, these claims create cascading risk: Reputational damage  when failed exits lead to employee lawsuits Direct financial liability  if Side A coverage is denied or exhausted Fund-level exposure  if partners are named and indemnification is unavailable This isn’t theoretical. These lawsuits are happening. Boards are being blindsided. And in many cases, coverage gaps are only discovered when it's already too late . If You’re On a Board, You Need to Hear This: If your company promotes the upside of equity, it must also disclose the downside.If your firm takes a board seat, it inherits disclosure and fiduciary obligations  - and with them, personal liability. Upward Risk Management At Upward Risk Management , we specialize in protecting venture-backed boards from precisely this kind of exposure. We’ve designed coverage structures for companies navigating: Complex cap tables Secondary sales Tender offers Exit scenarios with challenging waterfall dynamics And we’ve placed custom securities and Side A coverage  designed for the realities of startup litigation. Want Peace of Mind? Let us review your current D&O program.We’ll identify gaps, assess your securities exposure, and structure coverage that protects your board - not just your balance sheet. Reach out for a confidential review. Because the only thing worse than a lawsuit… is learning you’re not covered.

Understanding Private Equity and Venture Capital Portfolio Programs Executive Summary Over the past two decades advising private equity and venture capital firms, I’ve seen insurance evolve from a compliance task to a true strategic lever. When executed well, it protects board members, streamlines operations, and unlocks real savings. When handled poorly, it creates hidden risk, wasted spend, and reputational exposure. If your firm manages five or more portfolio companies , you already have enough leverage to implement a portfolio insurance fund program  that reduces risk, consolidates cost, and gives you clarity across the board. The only barrier has been execution. That’s why I founded Upward Risk Management , and why we built Undr AI : to eliminate the friction that made portfolio insurance strategies impractical - until now. Why Portfolio Fund Insurance Matters for PE and VC Firms A portfolio insurance strategy consolidates procurement, review, and renewal  across your investments. Done right, it transforms insurance from an operational burden into a strategic advantage. Economies of Scale By combining premium volume across portfolio companies, you gain real pricing power. We consistently see 20–40% savings versus standalone placements - plus better terms and stronger leverage at claim time. Standardized, Board-Protective Coverage Inconsistent D&O terms, silent exclusions, or missing EPL coverage expose board members and GPs to unnecessary risk. We structure Side A/B/C D&O, EPL, and Crime  coverage with best-in-class terms across the portfolio. Central Oversight Without Extra Admin With portfolio-wide monitoring , you can instantly track renewals, spot coverage gaps, and benchmark risk posture- without adding burden to CFOs or internal teams. Why Most Portfolio Fund Insurance Strategies Fail Despite the clear benefits, most firms never get a program off the ground. Why? Manual, repetitive application processes Dozens (or hundreds) of PDF policies No system for tracking limits, renewals, or policy language Fragmented broker relationships No bandwidth to manage it internally Legacy brokers  lack technology. Insurtechs  lack the expertise. URM was built to provide both. The URM + Undr AI - Fund Insurance Advantage At Upward Risk Management, we pair expert brokerage services with purpose-built AI tools designed to handle the complexity of portfolio insurance. Prefilled Applications We scrape structured data and reuse prior submissions to complete 70–90%  of each application - cutting down CFO input and speeding up quote turnaround. AI-Powered Policy Review Our platform reads policies like an underwriter to: Identify hidden exclusions  and sublimits Benchmark terms against industry best-in-class language Flag outdated or missing protections Real-Time Portfolio Dashboard Our clients get instant visibility across all companies: Track upcoming renewals Flag missing or expired policies Monitor coverage limits and carrier appetite Identify at-risk companies before claims happen Even if you don’t move to a full portfolio structure, this visibility alone creates clarity and control. Tailored Approach: Private Equity vs. Venture Capital We don’t take a one-size-fits-all approach. Our team has deep experience supporting both PE and VC investors—and we tailor execution accordingly. Investor Type Strategy Private Equity With management control, PE firms can enforce portfolio-wide mandates. We provide the framework and do the heavy lifting. Venture Capital VCs typically influence (not control) insurance decisions. We support portfolio companies directly with fast quoting, prefilled apps, and benchmarked policy options. In both models, the investor becomes a value-add channel —delivering trusted insurance placement to their companies. Final Word: Execute Without the Friction If you manage five or more companies, you qualify for a portfolio strategy today. The only question is whether you have the right partner to execute it - without noise or added admin . As a lawyer and broker, I built URM to deliver what legacy firms can’t - and what insurtech doesn’t understand. Upward Risk Management When expertise isn't optional.

Key Insurance Gaps for LenderTech Companies (And Why Specialized Coverage Matters) Introduction Lender-focused fintechs face complex, technical insurance risks that are often misunderstood (and underinsured) by standard startup policies. This guide highlights the three most critical gaps we commonly see in D&O and Tech E&O insurance for LenderTech companies: lender liability exclusions, regulatory sublimits, and restricted attorney selection. If your company originates loans, uses proprietary credit models, partners with banks, or operates under regulatory oversight, understanding these gaps is critical to protecting your business. Three Critical Coverage Gaps for LenderTechs 1. Lender Liability Coverage: Often Excluded What It Is: Lender liability refers to lawsuits or regulatory actions arising from alleged misconduct in loan origination, servicing, or collections. If your company interacts with borrowers (directly or through partners) you can be held liable for issues like: Misleading loan terms Servicing errors Unfair or deceptive collection practices Why It Matters: Many standard D&O and Tech E&O policies exclude borrower-facing risks unless lender liability coverage is specifically added. It doesn't matter if you use partner banks, fintech servicers, or outsource collections — regulators and plaintiffs will treat your company, and your board, as responsible if something goes wrong. Bottom Line: If you're touching the borrower experience, you need lender liability coverage. Technical structures won't shield you from regulatory enforcement or borrower litigation. 2. Regulatory Coverage: Capped by Sublimits What It Is: Regulatory coverage indemnifies the company and executives against defense costs, investigations, and settlements tied to actions from agencies like: CFPB (Consumer Financial Protection Bureau) FTC (Federal Trade Commission) SEC (Securities and Exchange Commission) State Attorneys General Why It Matters: For LenderTechs, regulatory claims often involve: Alleged violations of lending laws Consumer protection statutes (like UDAAP) Data privacy issues Discriminatory lending algorithms Yet most D&O policies cap regulatory claim coverage  with low sublimits - often $250K to $500K , even if the overall policy limit is several million. Bottom Line: Facing a CFPB or FTC action with only a few hundred thousand dollars of defense coverage can leave your company dangerously exposed. Regulatory investigations are among the most serious risks LenderTechs face — and most startup policies don't automatically cover them fully. Regulatory Sublimit A regulatory sublimit is a lower cap within your D&O policy  that specifically limits how much coverage you have for regulatory investigations and actions. Example: You buy $3M of total D&O coverage. But your regulatory claims sublimit is only $250K–$500K unless negotiated otherwise. Without attention to sublimits, companies risk feeling fully insured but being dangerously underprotected  when the real claims hit. 3. Defense Costs: Limits on Attorney Selection What It Is: When a regulatory investigation or serious litigation hits, having the right defense counsel is critical.Top-tier regulatory defense firms charge $1,500–$2,000 per hour — and early-stage defense work can shape the entire outcome of an enforcement action. Why It Matters: Many insurers include panel counsel requirements  in D&O policies.This means: You must select legal defense from a pre-approved list of firms. Non-panel firms require special approval — or are outright restricted. While panel firms may be sufficient for basic claims, complex regulatory investigations often require highly specialized counsel  with direct agency experience. Bottom Line: If regulatory risk is material to your business, your insurance should allow flexibility to pre-approve non-panel counsel  or negotiate flexibility to hire specialized regulatory defense teams when needed. Upward Risk Management When expertise isn't optional.

Learn what AI insurance endorsements really cover - and what they don’t. Discover the risks fintech and tech companies face when AI makes a decision, and how to close coverage gaps before claims arise. Executive Summary: AI systems are increasingly making business decisions, but most insurance policies haven’t caught up. Most endorsements don’t fully cover algorithmic bias, IP claims, or regulatory investigations. Companies must distinguish between building and using AI when assessing risk. Even strong endorsements require professional interpretation and advocacy to be effective. This article breaks down what to look for, what’s missing, and how to protect your company. Intro to AI Insurance Issues The AI your fintech just bought can scan millions of records, predict behavior, and make credit decisions in seconds. But when it denies a loan…Discriminates against someone…Or scrapes data it shouldn’t… Who’s responsible? When a human makes the decision, liability is clear. When a third party model does it?  Accountability, indemnification and subrogation get vague, fast. Accountability Problem: Who’s actually responsible? When a human makes the decision, liability is clear.When a model does it? Things get vague, fast. No matter what, if your company uses AI, you will be brought to the table, and if you are a director or officer, then your judgment will be questioned in tandem to the AI error/omission. The insurance problem: Most insurance policies are designed to cover human  mistakes. They were never built to cover machine-driven  judgment errors.  (Although, as their attorney I might argue that the machine is not truly making decisions…) The litigation problem: If your model reflects biased data through bias behavior, does that mean your company has always been biased?  A decent lawyer can (will) make this argument, probably via class action.    These questions are largely outstanding in the legal world, and partially answered in insurance through policy endorsements, we will review their efficacy below. What Is an AI Insurance Endorsement, and Why It Matters As AI-driven tools create new risk categories, insurers are trying to keep up - often by issuing endorsements . In insurance, an endorsement is a formal modification to a policy.  It can add coverage, limit it, or clarify how existing coverage applies.  Think of it as a patch to the original policy form.  This is especially important when the form was never designed for modern AI use cases. That makes endorsements the first line of defense  for companies using or building AI.  But the quality of these endorsements varies widely. Not All AI Companies Face the Same Risk Before evaluating coverage, understand your company’s AI profile: AI Builders  - Create algorithms, infrastructure, or custom models. Their risk centers on model performance, IP infringement, and regulatory scrutiny. AI Users  - Rely on third-party tools. Their risk includes operational failures, biased outcomes, and liability for decisions made by systems they don’t fully control. A one-size-fits-all endorsement won’t work. Effective policies must reflect whether your company builds  or uses  AI. What a Good AI Insurance Endorsement Should Include Done well, AI endorsements do three things: 1. Expand Key Definitions Update terms like "Professional Services," "Technology Product," or "Technology Services" to explicitly include AI-driven platforms. 2. Carve Back Exclusions Most policies exclude IP claims, discrimination allegations, and regulatory investigations. A strong endorsement will restore coverage for: Algorithmic bias AI-generated content/IP infringement Defense costs for AI-related regulatory investigations Client demands to remove or correct AI functionality 3. Provide Full Limits or Clear Sub-Limits Even if coverage is limited to $250K, that’s far better than total denial. Where Even the Best AI Insurance Endorsements Fall Short Endorsements don’t guarantee protection. Ambiguity:  AI-related terms are often poorly defined. Silent Gaps:  Some endorsements reference AI but still exclude the core exposure. Enforcement:  Even great language can fail if no one advocates for its intent when a claim hits. AI may be automated. But insurance claims are not. Real-World Perspective: Drafting AI Coverage from Both Sides We’ve drafted AI insurance endorsements for insurers, negotiated coverage and exclusions. I’ve also reviewed dozens of policies for AI-focused companies - from fintech lenders to infrastructure startups to model developers. What I’ve learned: an informed, knowledgable broker makes all the difference. A single misplaced exclusion or vague definition can turn a high-profile claim into an uninsured loss. If you’re an executive at an AI company, you don’t need theoretical coverage - you need enforceable language, carrier clarity, and someone who understands how AI decisions actually happen. Why Professional Oversight Still Matters Securing the right AI endorsement is only part of the battle.  You still need a professional who understands: How AI tools work Where bias, IP, and operational risk emerge How to enforce coverage in high-stakes, ambiguous claims scenarios Without that, even the best language can fall flat. Final Takeaway AI endorsements are evolving.  Some are real improvements. Many are not.  The difference isn’t just in what they say - it’s in how they’re written, interpreted, and enforced. If your business uses AI to make decisions, serve clients, or power your platform- don’t rely on legacy forms. Don’t rely on assumptions. Review your policy.  Understand your endorsement. And make sure someone at the table knows how to fight for it. Need Help? If your company builds or uses AI and you're unsure whether your insurance program actually covers the decisions being made, we can help. Contact Upward Risk Management  to schedule a review or learn more about Undr AI’s  platform for real-time risk insights.

What Mobley v. Workday  reveals about product design, legal risk, and the urgent need for specific AI insurance coverage By Steven Barge-Siever, Esq. When Mobley v. Workday  survived a motion to dismiss this year, headlines focused on a narrow point: AI vendors might be directly liable for discriminatory hiring outcomes under federal civil rights law. That alone was historic. But the implications are bigger. This case exposes a fundamental problem that exists far beyond employment discrimination: AI systems are being deployed into high-stakes, real-world contexts without a corresponding understanding of how legal, social, and operational risk actually manifests.  The people building these systems are often far removed from the end results, until a lawsuit drags them in. The Problem Isn’t Just AI Bias Risk - It’s Blind Spots We talk a lot about AI “bias.” But bias is only one category of legal risk. What Mobley  shows is that AI systems, and especially enterprise-grade tools sold to other businesses, can be legally and ethically problematic even when they are functioning as designed. Why? Because they’re usually built in technical or product-centric environments where the focus is on functionality, not liability. Vendors optimize for efficiency, throughput, automation. Clients optimize for ease of use. No one is optimizing for legal defensibility or downstream harm until it’s already happened. That’s how we get tools that: Automate decisions but obscure accountability Filter applicants using proxies that correlate with protected traits Score individuals or organizations using opaque logic no one can fully explain And then , when a claim arises (discrimination, regulatory overreach, or negligent deployment) the attorneys arrive. Not the engineers. Not the product managers. The lawyers. And the narrative changes from performance to blame. What Mobley  Actually Signals for AI-Centered Litigation Risk In Mobley , the plaintiff alleged that Workday’s hiring software played a gatekeeping role in rejecting him based on race, age, and disability. But what matters more than the allegations is how the court framed the vendor’s role . Workday wasn’t just a toolmaker. It was plausibly an agent  - a party that shaped employment decisions on behalf of its clients. That theory opens the door to direct liability - not only for AI in HR, but for any AI system that exercises functional control over regulated decisions. This applies not just to hiring, but also: Credit scoring tools  used by fintechs Underwriting engines  used by insurers Patient triage models  used by healthtech platforms Moderation systems  used by social platforms In each case, the vendor often claims: we don’t make decisions, our clients do.   But courts may soon say: if your product meaningfully replaces human judgment, you're in the decision loop, and on the liability hook. The Design Gap: What Happens When Legal Risk Isn’t a Feature of Your AI? AI products aren’t typically designed by lawyers. That’s not a dig - it’s an observation. In most companies, legal gets looped in late. Sometimes post-launch. Often post-incident. That delay is a design flaw. If your AI product touches regulated activities (employment, finance, healthcare, housing) you need to build legal foresight into  the product. Not as a compliance checklist. As a core design principle : How does this system track and document decision logic? Who owns the risk of errors or disparate impact? Can a regulator or judge understand how this model arrived at an outcome? Will a court view your tool as a neutral platform — or an agent making real-world calls? Right now, too many AI products answer these questions after  things go wrong. That is the dynamic Mobley  is warning us about. The Shift Ahead: From Tech-First to Accountability-First The early AI boom was driven by scale, speed, and novelty. But the next phase will be shaped by legal structure, public trust, and traceable decision logic . This won’t slow innovation. It will separate serious builders from everyone else . Vendors who train their models on quality data, and show their work, will win larger, more sophisticated clients. The kind with attorneys on deck. Systems with clear audit trails and explainability features will become default. Legal, compliance, and product design will stop being silos. In short: the AI companies that think like regulated companies will survive as AI becomes regulated. Final Thought: Mobley Was the Warning Shot If you’re an AI vendor, Mobley  isn’t just a headline - it’s a preview of how courts, regulators, and plaintiffs will view your role going forward. And if you’re building AI that faces the world, and not just internal workflows, you need to assume that your product is going to end up in court someday. The only question is: Will your system be defensible or just defensively built after the fact? About Upward Risk Management At Upward Risk Management, we don’t just broker AI coverage - we helped shape it. Our founder is a former insurance attorney who has drafted AI-specific endorsements, advised on claim strategies, and placed coverage for some of the most complex AI-driven platforms in fintech, SaaS, and enterprise tech. We work directly with underwriters, legal counsel, and founders to ensure your insurance program actually matches how your AI operates - and how it will be scrutinized in court. When AI risk becomes real, URM is already there.

Benchmarking is everywhere in corporate insurance, but does it actually help clients? Too often, benchmarking is used as a shortcut- showing what other companies buy rather than what a business actually needs. The reality is that risk isn’t one-size-fits-all. True risk assessment requires more than just averages; it demands a deep understanding of industry-specific exposures, financial impact, and litigation trends. At URM, we’re using AI-driven insights to move beyond benchmarking and deliver precision in risk recommendations. #insurtech #riskmanagement #AI #insurancebrokers #benchmarking #insurancedata

(And What Sophisticated LPs Expect Today) Introduction The relationship between venture capital firms and their Limited Partners (LPs) has evolved. As institutional capital flows into venture funds, LP expectations around governance, transparency, and risk management have sharpened considerably. Today, it is no longer optional for venture firms to maintain fund-specific insurance protections.  Through diligence processes, side letters, and compliance certifications  LPs are actively requiring funds carry tailored insurance coverage to safeguard both general partners and the capital LPs have entrusted to them. This shift reflects real risks venture firms face - from litigation and regulatory scrutiny to operational complexity - and the growing recognition that insurance for venture capital funds  is now a critical piece of professional fund management. 1. Fund-Level Risks Are Real - and LPs Know It Venture capital firms today face heightened exposure to: LP lawsuits  alleging mismanagement, conflicts of interest, or breaches of fiduciary duty Regulatory investigations  by the SEC around disclosure practices, hidden fees, and co-investment conflicts Example :  in 2022 and 2023, the SEC launched enforcement actions against private fund advisers (including venture firms) for failures in fee transparency, conflict disclosures, and compliance oversight. Employment claims  brought by fund-level employees as firms build out operational teams Reputational risks  stemming from governance issues at portfolio companies or from regulatory fines LPs are well aware of these exposures, and increasingly expect venture funds to proactively mitigate them. Insurance is no longer viewed as optional compliance; it is a necessary financial backstop that preserves investor capital and ensures operational continuity. 2. Insurance is Designed to Protect LP Capital - Not Just General Partners Dedicated venture capital fund insurance  is critical because it creates a separate, external pool of resources to respond to legal challenges. Without insurance, defense costs, settlements, or judgments may have to be paid from fund assets, directly harming LP returns. With proper fund D&O insurance  and General Partnership Liability (GPL) coverage , costs are absorbed externally, insulating both the general partners and the LPs' investments. Insurance aligns the interests of GPs and LPs by ensuring that risks are managed responsibly and do not unexpectedly erode fund capital. 3. Institutional LPs Expect Institutional-Grade Risk Management Institutional LPs (pensions, endowments, sovereign wealth funds, and large family offices) expect venture firms to operate with the same governance rigor they demand from public company boards or private equity funds. Specifically, they expect venture firms to: Maintain dedicated Fund D&O Insurance  to cover management and fiduciary exposures Carry General Partnership Liability (GPL) Insurance  to protect the partnership entity and individual GPs Secure Employment Practices Liability (EPL) Insurance  if the firm has employees Demonstrate that policies are placed with highly rated insurers and meet specific limit thresholds During fundraising, these insurance protections are reviewed alongside audited financials, compliance policies, and fund documents. Sophisticated LPs are no longer assuming sophisticated insurance exists - they are verifying its adequacy during diligence. 4. Different LP Profiles Drive Different Insurance Expectations (Breakout Insight) While all LPs are increasingly conscious of risk, the type of LP influences how insurance requirements are handled : Institutional LPs Family Offices / Individual LPs Risk Expectations Formalized and rigorous. Insurance is seen as mandatory for fiduciary reasons. Often more informal, but growing; expect professionalism, especially at larger family offices. Documentation Side letters requiring specific insurance coverages, minimum limits, and notifications of material changes. Rarely formal requirements unless the family office is sophisticated; insurance often assumed rather than verified. Diligence Approach Comprehensive risk reviews, including insurance audits by third parties. More relationship-driven; diligence may focus more on fund strategy unless risk concerns are triggered. Regulatory Sensitivity Very high - institutions must justify their risk frameworks to stakeholders. Lower, unless operating as a quasi-institutional family office managing large AUM. ✅  Key Insight: Institutional LPs  require documented, audited insurance protections. Family offices and individuals  often trust GPs to handle insurance, but the expectation of professionalism remains. For venture capital firms , this means that regardless of LP type, demonstrating that proper risk management infrastructure, including insurance, is in place strengthens credibility, protects relationships, and supports smoother fundraising. 5. Side Letters Are Now Formalizing Insurance Obligations Beyond diligence conversations, insurance requirements are increasingly embedded directly into fund agreements through side letters . Typical side letter provisions require: Maintaining specified D&O and GPL insurance limits Naming the LP as an additional insured where feasible Notifying LPs of any lapses, cancellations, or material policy changes Providing annual proof of insurance upon request Some LPs even reserve rights to review and approve insurer changes for successor funds. Venture firms that anticipate these requirements and build insurance into their compliance infrastructure will be far better positioned during fundraising. 6. Insurance Strengthens Fund Positioning in a Competitive Market Proactively structuring venture capital fund insurance  is not just about meeting LP demands. It’s about strengthening the fund's operational credibility at a time when competition for LP capital is intensifying. Funds that present: Tailored, active insurance coverage, Alignment between risk and operations, Clear, proactive compliance practices, signal professionalism, foresight, and fiduciary seriousness - critical factors in winning commitments from sophisticated LPs. Conclusion LPs are requiring venture capital firms to maintain dedicated insurance because the risks to fund assets and reputations are both real and rising. Fund D&O insurance, GPL insurance, and EPL insurance  are no longer optional tools - they are baseline expectations for modern venture firms. Protecting the fund’s leadership, insulating LP capital, and preserving operational integrity are critical to long-term success.  And in today’s environment, demonstrating smart, tailored risk management is not just protective - it is a competitive advantage. If your fund is raising successor capital, expanding its LP base, or formalizing side letter obligations, now is the time to ensure your insurance structure aligns with today’s LP and regulatory expectations. We work with venture firms to structure efficient, fund-specific insurance programs that deliver real protection - without disrupting the pace of growth.

We often hear insurance is broken, our clients disagree.

AI is streamlining the insurance process, but when it comes to completing applications, brokers need to be careful. While automation can speed up data entry and reduce errors, it also shifts liability. If a broker (or an AI tool) fills out an application incorrectly, the company, not the client, may be held responsible for omissions or misrepresentations. Understanding where technology enhances efficiency versus where it introduces risk is critical for both brokers and their clients. #insurtech #riskmanagement #AI #insurancebrokers #fintech #insurance

You’ve probably heard that a butterfly flapping its wings in one part of the world could set off a chain reaction leading to a hurricane.   But have you heard the [insurance] saying that a hurricane in Florida impacts your D&O in California?   The seemingly convoluted nature of insurance premiums become clearer once you understand them, and so are the broker solutions.