EU Legislation After the AI Act: Brussels Considers New Liability Rules

Key Takeaways

• The EU has opened a consultation on a proposed AI Liability Directive (AILD).
• The AILD would establish a liability regime for AI developers and users.
• Key questions the consultation will explore include whether such a directive is even needed and whether any new legislation should mandate AI liability insurance.

With the EU’s AI Act now officially in force, lawmakers have turned their attention to the next legislative proposal aimed at artificial intelligence technology.

First proposed in 2022, the AI Liability Directive (AILD) would establish a unified, EU-wide civil liability framework for damage caused by AI systems. However, a consultation launched on Feb. 3 points to divided opinions on the proposed legislation.

Does the EU Need More AI Rules?

When the European Commission initially proposed the AILD, AI was regulated by a patchwork of EU and national laws—many of them written with completely different technological contexts in mind.

Since then, however, the AI Act has harmonized the regulatory framework covering the technology’s use and development.

In 2024, the EU also updated the Product Liability Directive (PLD) to adapt it to the digital age, incorporating a new section on “software and AI systems” that outlines developers’ responsibilities to users.

Some stakeholders argue that the PLD sufficiently covers all potential AI liability scenarios and that the AILD is no longer necessary.

However, a European Parliament impact assessment concluded that several matters remain unaddressed by the revised PLD.

For starters, the PLD only establishes liability for professional or corporate AI users, leaving a “regulatory void” when it comes to harm caused by non-professional AI users.

Additionally, the PLD currently specifies a narrow range of damages eligible for compensation, which, the impact assessment noted, creates “significant loopholes” in coverage.

For example, the directive doesn’t cover instances where AI leads to discriminatory outcomes, violations involving people’s right to privacy and dignity or questions relating to the environmental and climate impact of AI systems.

Lawmakers Consider Mandating AI Liability Insurance

One of the questions proposed by the AILD consultation is whether the proposed directive should include an obligation to insure against AI liability risks.

The European Commission’s position is that all operators of high-risk AI systems should possess liability insurance. This could impose significant extra costs on companies that create technology deemed high-risk under Article 6 of the AI Act.

For example, developers of biometric surveillance tools may be required to insure against the risk of false identification.

As outlined in the consultation, the prospect of requiring AI liability insurance raises the question of whether insurers have enough data to underwrite AI risks effectively.

In one recent report, Deloitte identified a global shortage of AI-related insurance products, noting that “the lack of historic data on the performance of AI models and the speed at which they are evolving can make assessing and pricing risks difficult.”

AI Liability Directive Next Steps

Following the six-week consultation, the European Parliament’s AILD rapporteur Axel Voss will report findings in June. He will then open a second, twelve-week consultation.

Parliament and the European Commission will hold negotiations on the proposed directive between September and December. The Committee on Legal Affairs is expected to vote on the final document in January 2026 ahead of a final plenary session in February.