Armilla AI, a US-based InsurTech specialising in AI liability coverage, has raised $25m to expand its insurance offerings amid growing demand for protection against generative AI risks.
The company intends to use the $25m to further scale and distribute its expanded AI Liability Policy, according to FF News.
The upgraded coverage now includes traditional general liability while offering protection for AI regulatory violations, non-breach privacy incidents, data leakage, AI model error liability, harmful outputs, AI agent failures, AI-driven property damage, and defence costs under new AI regulations such as the EU AI Act and Colorado AI Act.
“Most insurance policies weren’t designed for generative AI or AI agents.” Armilla AI CEO Karthik Ramakrishnan said. “But companies are already deploying these systems at scale. After two years of focused underwriting development, we believe our expanded policy gives risk managers a clear path forward.”
The firm provides purpose-built insurance policies for AI systems, designed to cover failures, inaccuracies, and misadvice caused by generative AI or autonomous agents.
Unlike traditional coverage retrofitted from cyber, errors and omissions, or general liability policies, Armilla’s solutions address the specific ways AI systems fail, providing clear, affirmative protection where conventional policies fall short.
Armilla became the first Lloyd’s Coverholder dedicated exclusively to AI liability in 2024, following its participation in Lloyd’s Lab.
The standalone AI liability product launched in April 2025 and now serves clients ranging from AI scale-ups to Fortune 1000 companies embedding generative or agentic AI into core operations.
Policies are supported by independent AI system certification and risk reporting, informed by more than 500 AI evaluations across regulated industries, including financial services, healthcare, human resources, telecommunications, retail, and professional services.
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