AI and Professional Indemnity
AI tools are rapidly becoming part of everyday business – or if not, they should be! From automating admin to speeding up reporting, drafting content to providing advice, AI is giving us time back to work, think, and action the bigger projects.
But here’s the thing: just because it’s fast and impressive doesn’t mean it’s risk-free.
As a business owner, you’re still responsible for everything your business delivers.
If you and your team are using ChatGPT, Microsoft Copilot, Claude, Manus or another uniquely named generative AI tool that generates content or recommendations, you need to know where the guardrails are.
Consider the following when using AI in your business.
Data security and confidentiality
This is where I see the biggest blind spots. Team members copy client data into AI tools to “speed up” a summary or document, and just like that, confidential information is out of your control.
If you’re using free or public AI tools, any data entered may be stored, logged, or used to train future models. Even if you delete it.
As a business owner, you’re responsible for how your client and customer data is handled. Privacy breaches, especially in sectors like health, finance, HR, or law, can have serious consequences. You’re being paid for your expertise and compliance with regulatory standards, so make sure you uphold them.
Using AI to assist with tasks is fine; in fact, I’d encourage it. But if it replaces professional judgment and something goes wrong, the issue will sit with you.
[Top tip] Use a paid version and turn on options that allow the platform to use data to train AI. Do so with caution. This may still not be enough when working with sensitive information.
Ownership and IP: who actually owns AI-generated work?
If you create something for a client using AI, do you own the rights? Some tools reserve the right to reuse or reproduce outputs; others don’t give you commercial usage rights unless you’re on a paid plan.
If your business delivers creative, design, copywriting, product development, or innovation work, make sure you know who owns what.
You’re still liable, even if AI does the work
If AI helps you generate a client email, report, pitch, or proposal, and that content causes a problem, the responsibility doesn’t sit with the tool, it sits with you.
Most policies assume that you, or another qualified human, is still overseeing the work.
So, if AI creates an error that costs your client money or breaches a contract, that claim has your name on it.
Here’s what we’re recommending for our clients:
- Set boundaries for how AI is used in your business
- Which tools are staff allowed to use?
- Can client data be used?
- What’s the process for reviewing AI-generated content before it goes out.
- Talk to your PI insurer
- Ask how AI is covered in your professional indemnity policy.
- Educate your team
- Risk comes from people who don’t know what is and isn’t safe. Build some guidelines into your onboarding processes to ensure all team members are educated around AI use.
- Keep human oversight
- Think of AI as a slightly untrustworthy intern – sometimes what it produces can be spot on, and other times it’s little off.
- Anything client-facing should go through a human who understands the work.
An added business resource
If used properly, AI can be a huge time saver for your business.
But it doesn’t replace your professional responsibilities. Nor does it absolve you of liability. And it definitely doesn’t stop mistakes from slipping through if you’re not paying attention.
If you’re using AI in your business, or letting your team use it, make sure you’ve thought through how it impacts your risk, your reputation, and your clients’ trust.
