Who is this for?

AI strategy consultants, adoption advisers, implementation partners, AI trainers, governance advisers and businesses helping clients select and deploy third-party AI products.

Where claims can arise

A client may allege that you recommended an unsuitable system, overlooked data handling risks or configured a workflow incorrectly. Training and governance advice can also generate claims if the client relies on it. Advice about legal compliance or regulated professional matters needs particular attention to your qualifications, scope and policy definition of services.

Insurance options to review

• Technology professional indemnity: liability claims arising from defined technology services, advice or software errors, subject to the wording.
• Cyber insurance: covered privacy and network security events, incident response and other selected cyber exposures. A faulty AI output is not automatically a cyber event.
• Public and products liability: relevant third-party injury and property damage exposures, especially where hardware, installation or physical control is involved. Check professional services and cyber exclusions.
• Management liability and business cover: consider directors and officers, employment, property and other covers according to your business structure and activities.

Review AI-specific exclusions or restrictions, intellectual property cover, assumed contractual liability, performance guarantees, rectification costs, fines and penalties, territorial limits and US/Canadian exposures. Defence costs, excesses, sublimits and aggregate limits can materially affect the protection available. Cover is subject to underwriting and the policy terms.

Illustrative claim scenario

Hypothetical example: A consultant connects a client’s document repository to an AI assistant using overly broad permissions. Confidential information becomes accessible to unintended users. Professional negligence and privacy allegations may involve different policy sections and exclusions.

This illustrates an exposure, not a promise of cover.

What underwriters need to understand

Describe the split between advice, training, configuration and ongoing support. Provide engagement letters, acceptance criteria, limits of responsibility, subcontractor arrangements and your process for assessing third-party tools. Record client approvals and escalation to suitably qualified advisers.

Preparing an insurance review

Send a description of your activities and end uses, turnover split by service and country, customer sectors, representative contracts, existing policy schedules and claims or incident history. Identify subcontractors, model and cloud providers, sensitive data, overseas customers and the largest credible customer loss. Use a secure follow-up channel for confidential technical material.

Many technology PI policies operate on a claims-made basis. Review the retroactive date and notification requirements, and disclose known claims or circumstances when seeking cover. Changes to activities and deployment scale should also be discussed with your broker.

Frequently asked questions

Do I need PI if I do not write software?

Professional indemnity may still be relevant where you give advice, training or implementation services. The insured services must accurately describe that work.

Is AI automatically covered by an existing technology policy?

No. The declared activities, insured services, exclusions and endorsements need review. Tell the insurer how AI is developed, supplied and used before relying on the policy.

Related insurance guides

AI company insurance · Technology professional indemnity · Technology product liability · Software and SaaS

Mercantile provides insurance broking and advice on policy cover. Legal interpretation, contract drafting or negotiation, regulatory compliance, clinical decisions and operational controls should be addressed with your relevant advisers. Insurers may ask about your existing data-handling and security arrangements when assessing the risk.

General information only. Insurance needs, availability and claim outcomes depend on your circumstances and the insurer’s terms.