An AI support agent for the Cursor coding editor told users about a one-device login policy that did not exist. Users complained publicly and some cancelled their subscriptions before the company apologised.
Mostly first-party revenue loss; shows how a hallucination becomes a customer-relations and contract issue.
This is an educational research summary built from public information. Allegations in pending cases are unproven, and the insurance notes above are for discussion, not coverage advice. Whether any policy responds depends on its specific wording, exclusions, endorsements, the facts, and applicable law.