AI is changing quickly. Professional liability insurance will have to change with it. •
AI isn ' t only being used by professionals. Their clients are using it too.
Many professional liability policies define a claim to include some form of written demand against an insured seeking damages or other relief arising from an alleged wrongful professional act. Depending on the specific policy wording, that written demand doesn ' t necessarily have to be a lawsuit drafted by an attorney.
Generative AI has made it significantly easier for individuals and businesses to create sophisticated demand letters on their own.
That means a dissatisfied client who might previously have sent an informal complaint— or done nothing at all— can now use generative AI to produce a formal-looking demand letter alleging negligence, identifying damages and demanding compensation. Some of those demands may ultimately have merit. Others may not. But either way, they may need to be reported, evaluated and potentially defended.
From an E & O standpoint, AI therefore presents an interesting two-sided exposure: professionals are using AI to perform their services, while their clients are using AI to pursue claims against them.
WHAT SHOULD BROKERS BE WATCHING?
If an insurance agent uses generative AI to compare two policies and the AI misses an important exclusion, is that fundamentally an AI loss, or is it a traditional professional negligence claim involving a new tool? That ' s a question the professional liability market will increasingly have to address.
For brokers, the takeaway is simple: don ' t assume that this year ' s professional liability policy provides the same protection as last year ' s policy.
Read the endorsements. Watch for new AI definitions, exclusions and sublimits. Ask how the insured is using AI in its professional services. And, most importantly, understand whether new AI wording could unintentionally remove coverage for the very professional services the policy was purchased to protect.
AI is changing quickly. Professional liability insurance will have to change with it. •
Sonyia Townsend, RPLU, CPLP, AU joined Arlington / Roe in 2008 and was promoted to Vice President Professional Liability, Practice Leader. Before moving to Indianapolis, she worked for recreational vehicle manufacturers in warranty and human resource departments. Sonyia has a degree from Lipscomb University and holds a Registered Professional Liability Underwriter( RPLU) designation.
While broad AI exclusions are not yet the norm across professional liability insurance, I expect policy language surrounding AI to continue developing rapidly.
Over the next 6 – 12 months, brokers should pay particularly close attention to renewal quotes and new endorsements addressing artificial intelligence and, specifically, generative AI.
An especially important question will be how broadly those exclusions are written.
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