Blog / 5 August 2026 · 5 min read
Will AI Insurance Underwriters Start Asking About Your Firm's AI Use?
Professional liability underwriters are already asking law firms about their AI governance. Here's what that means and how to prepare.
Quick Answer
Yes, and for many firms it's already happening. Underwriters are now asking firms directly whether they use AI, whether they police it, and whether they have protocols in place. Coverage increasingly depends on documented governance practices and a clear AI risk assessment. Firms without an answer to these questions risk facing higher premiums, coverage exclusions, or difficult renewal conversations.
Why Underwriters Started Asking
For a couple of years, most firms operated under what's often called silent AI cover, meaning professional liability policies simply didn't mention AI use one way or another. That silence has started disappearing from renewal documentation as the market shifts. The market has been described as going through a structural break specifically around how AI use is underwritten.
The reason is straightforward from an insurer's perspective. AI introduces new categories of risk, like fabricated citations reaching a filing or a confidentiality breach through a poorly vetted tool, and insurers want to know whether a firm has controls in place before they price that risk.
What Underwriters Are Actually Asking
The standard set of questions at renewal now commonly includes some version of: Do you use AI? Do you police it? Do you have protocols in place? This has become close to standard at most professional liability renewal cycles, not a rare or unusual line of questioning.
Affirmative coverage for AI related risk typically now depends on:
- Documented governance practices, not just informal habits
- A completed AI risk assessment for the firm
- Evidence of a review process for AI generated work product
What Happens If a Firm Doesn't Have Answers
Cyber underwriters have moved further and faster on this than professional liability underwriters, but the gap is closing. Firms without clear governance documentation risk manuscript exclusions, meaning specific carve outs removing AI related incidents from coverage, higher premiums, or a more difficult renewal process overall.
For a small or mid sized firm, this isn't a distant concern. It's increasingly a practical, near term renewal issue.
What "Documented Governance" Actually Looks Like
It doesn't need to be an elaborate compliance program. At minimum, it typically means:
- A written policy on which AI tools are approved for use and which categories of client data can go into them
- A record of how AI generated output is reviewed before reaching a client or a filing
- Some form of documented risk assessment showing the firm has actually evaluated its AI usage, not just adopted tools ad hoc
- A named person or role responsible for AI governance, even at a small firm
FAQ
Does this apply to small firms, or just large ones?
It applies broadly. Underwriter questions at renewal aren't typically scaled down for smaller firms, and smaller firms without dedicated risk or compliance staff often have the least documentation in place.
What if our firm barely uses AI?
Even minimal or informal AI use is worth documenting. Underwriters are asking the question regardless of how much a firm uses AI, and "we don't really use it" without evidence is a weaker answer than a firm expects.
How urgent is this?
Given how quickly this shifted through 2025 and into 2026, firms without documentation in place should treat this as a near term priority rather than something to address eventually.
The Bottom Line
AI governance has moved from a nice to have to a factor directly affecting a firm's insurance coverage and cost. Firms that can show a clear, documented approach to AI use are in a stronger position at renewal than firms relying on informal habits alone.
Not sure whether your firm's current AI usage would hold up to an underwriter's questions? Our AI Tools Assessment gives you a clear picture of your current tools and workflows as a starting point for that documentation.