AI and Insurance: what changes with Legislative Decree 160/2026

Direct action against the insurer (Art. 20)

For insurers, the main innovation is introduced by Article 20 of Legislative Decree No. 160/2026. Anyone who has suffered damage caused by an AI system may bring a direct action against the insurer providing civil liability coverage to the party responsible for the damage.

• Insurance policy information. Before bringing an action, the claimant may ask the alleged liable party whether they have a professional insurance. The latter must respond within 30 days, providing the details of the insurance contract and the insurance company. If they fail to respond or provide an incomplete response, the court may take this into account as evidence pursuant to Article 116 of the Italian Code of Civil Procedure, according to which the court may draw evidentiary inferences from the parties’ conduct. However, making such a request is not mandatory in order to bring an action.
• Limits. The action may only be brought within the insurance contract limit.
• Defences. The insurance company may raise against the injured party only contractual defences that arose prior to the occurrence of the loss. The insurer retains its right of recourse against the insured if, under the contract, it would have been entitled to refuse or reduce payment.
• Procedural aspects. The liable party must be joined to the proceedings as a necessary co-defendant. The prescription period is the same as that applicable to the main action.

A more stringent liability regime - Other relevant provisions

In addition, the direct action is complemented by three other rules that strengthen the position of the injured party:

• Access to evidence (Article 17). The court may order the opposing party or third parties to disclose documentation concerning the operation of the AI system, such as logs, technical documentation, risk management records and human oversight documentation. If the order is not complied with, the facts alleged by the injured party may be deemed admitted. A third party that fails to disclose the requested documentation may be subject to a sanction from EUR 1,500 to EUR 10,000.
• Presumed causal link (Article 18). If the damage results from a breach of obligations under the AI Act, the causal link is presumed, unless evidences otherwise.
• Compliance is not sufficient (Article 19). Compliance with the AI Act, including through certification, does not in itself exclude liability. Consequently, an insurance policy cannot limit coverage solely to cases where the artificial intelligence system fails to comply with the obligations laid down by the AI Act.

The implications for insurance companies

• Increased demand for coverage. Producers, professional users and deployers of high-risk AI systems will need adequate third-party liability insurance policies.
• Policies to be revised. Insurers may raise only coverage defences based on circumstances predating the claim. In accordance with general terms and conditions will need to be reviewed, with particular attention to how the insured risk is defined.
• New underwriting criteria. The presumption of a causal link and the reduced significance of compliance may require new assessments of actuarial models and risk underwriting criteria.

Some open issues

• Who is the “liable party”? Article 20 does not identify a specific person. It refers to the “the person considered liable for the damage” and to the “person identified as liable for the damage”. For the purposes of Title II, including the chapter on compensation, the Decree refers back to the definitions set out in Article 3 of the AI Act, which distinguishes, among the various roles listed therein, between the following: the provider (who develops an AI system), the deployer (who uses an AI system), the importer (who places on the market an AI system bearing the name or trademark of an operator established in a third country) and the distributor (who makes an AI system available on the market). The risk of overlaps between different liability regimes and potentially liable parties, and therefore between different insurance coverages, is a real one.
• Which defences may the insurer not raise? Article 20 merely provides that contractual defences may be raised “provided that they predate the loss [or the claim: in our view, the Italian term “sinistro” in this context could be interpreted in either sense, depending on the applicable policy trigger, although the issue is not entirely free from doubt]”. It does not set out a list. Defences relating to events occurring after the loss therefore appear to be excluded, such as late notification of, or failure to report, the claim under Articles 1913–1915 of the Italian Civil Code. In such cases, the insurer may only exercise its right of recourse against the insured. It remains to be clarified how situations such as non-payment of the premium, resulting in suspension of coverage at the time of the event, should be treated.
• Which policy? The provision refers in general to the “civil liability insurance contract relating to the damage”. In principle, therefore, any third-party liability policy covering the damage could be subject to a direct action: general liability, product liability, cyber insurance and even professional liability insurance policies. Consider, for example, a lawyer or consultant who, acting as a deployer, causes damage to a client by using an AI tool. This represents a significant expansion for policies that were originally designed without taking this risk into account.
• A “Without a Framework” direct action. In other cases of direct action under Italian law, such as motor vehicle liability insurance and medical malpractice liability insurance, the protection afforded to the injured party is based on three elements: a mandatory insurance requirement, an obligation on insurers to enter into the contract, at least in the case of motor vehicle liability insurance, and a regulatory framework governing the minimum contents of the policy. Legislative Decree No. 160/2026 provides for none of these three elements. The injured party has a direct action only if an insurance policy exists, and within the limits of the policy limits and terms freely negotiated by the parties. This gives rise to greater uncertainty as to the effectiveness of the protection afforded, the balance between the no-opposability of defences and contractual freedom, and the availability and pricing of insurance coverage.

Precisely in light of the foregoing, the effectiveness of the new Decree will largely depend on the choices made by the insurance market and on the interpretation adopted by the courts, as well as on any corrective measures that may be introduced, which will need to be closely monitored in the near future.

In Summary

Legislative Decree No. 160/2026 significantly strengthens the protection afforded to those who suffer damage caused by AI. It does so through mechanisms such as access to evidence, the presumption of a causal link, and the right to bring a direct action against the insurer. However, the direct action has been introduced without a mandatory insurance requirement and without the regulatory framework governing insurance policies that accompanies it in other sectors.

For insurance companies, the challenge is twofold: to offer products suited to the new demand and to accurately assess a risk that is evolving rapidly.