Authored by Sara Weathers

Artificial intelligence transforms law firms' operations from document review and legal research to client communications. However, as AI becomes an integral part of daily practice, it introduces new risks that traditional insurance may not fully address.

1. The Rise of AI-Driven Errors
AI tools can streamline workflows, but the liability may still fall on the firm when they make mistakes, such as misinterpreting data or generating inaccurate legal insights. Lawyers' Professional Liability insurance should be reviewed to ensure it accounts for errors involving AI-assisted work.

2. Data Privacy and Cyber Threats
AI systems rely on vast amounts of sensitive data, increasing exposure to breaches and misuse. Firms using AI tools must ensure their cyber liability coverage extends to losses caused by AI-driven attacks or accidental disclosures of client information.

3. Ethical and Compliance Considerations
Bar associations are beginning to issue guidance on the ethical use of AI in legal practice. Failure to supervise or verify AI-generated work could lead to disciplinary action or negligence claims, making comprehensive professional liability insurance even more critical.

4. Preparing for the Future
As insurers adapt to evolving technology, firms should expect new coverage options specifically addressing AI-related risks. Conducting regular policy reviews ensures your insurance keeps pace with innovation.

AI offers enormous efficiency and accuracy benefits, but redefines what "risk" looks like in the modern law firm. Staying ahead means pairing innovative technology with smarter coverage.