Authored by Sara Weathers

Artificial Intelligence (AI) is reshaping the legal industry at an unprecedented pace. From automated document reviews to AI-driven research tools, law firms increasingly embrace technology to improve efficiency and client service. However, with innovation comes new risks, and insurance coverage must evolve accordingly.

Emerging Risks Law Firms Must Consider:

• Errors & Omissions: AI tools can produce inaccurate or biased outputs. Firms may face malpractice claims if these errors influence legal advice or case strategy.
• Data Privacy Breaches: AI systems require access to vast amounts of sensitive client data, creating additional exposure to cyber threats and data privacy violations.
• Regulatory Uncertainty: As AI use grows, regulatory scrutiny is intensifying. Misuse or ethical lapses involving AI tools could trigger legal and reputational consequences.

Insurance Considerations for AI Use:

• Review Existing Policies: Many standard professional liability policies may not fully address errors from AI-generated work products.
• Cyber Liability Coverage: Ensure cyber policies extend to cover AI-driven data incidents, including those caused by algorithmic failures or mismanagement.

AI offers exciting opportunities for law firms but also creates complex risks. Firms should actively work with their insurance advisors to review their coverage and ensure it aligns with their technological advancements. Proactive risk management and tailored insurance solutions can empower your firm to innovate confidently and effectively.

Have questions about your firm’s insurance policies? AdvoCap Insurance is here to help! Contact us here.