Honan has flagged dangers of using generative artificial intelligence (AI) tools such as ChatGPT to provide advice to customers, citing potential impact on insurance coverage. 

Specialised professional indemnity or errors and omissions insurance exists to protect insured companies against claims from clients that allege financial losses due to incorrect advice. 

However, the use of AI in any professional capacity could incur specific policy conditions in the future, potentially impacting insurance covers, the implications of which must be considered seriously and on an ongoing basis. 

“Organisations that provide advice to their customers, whether via their blog or direct consultation, cannot rely on the accuracy of the information generative AI provides,” Honan Professional Risk Placement Manager Ben Robinson said. 

Honan cites an example of a lawyer who might have decided to ask ChatGPT to summarise their clients’ annual financial reports. 

If the summary is incorrect and the wrong advice is provided to the client, this puts the lawyer in breach of their duty of care towards their client. In such a situation both the individual and their company are at risk of being sued. 

“The key concern for all professional services businesses should be the scale on which erroneous advice can be provided through tools like ChatGPT,” Mr Robinson said. 

“One person giving the wrong advice could result in a lost client – 500 people giving the wrong advice could result in a significant lawsuit.” 

As Mr Robinson sees it, “ChatGPT is highly prone to errors and misinformation”. 

“Generative AI is only in its infancy, and many of the policies surrounding its use are yet to be established,” Mr Robinson said. 

“However, we expect that laws surrounding legal and fair use of generative AI will slowly begin to emerge.” 

Given the significant risk of data privacy breach, the potential breach of cyber insurance and professional indemnity policies, as well as the potential risk of copyright infringement, organisations need to weigh the pros and cons of using generative AI. 

“At this stage, there’s no right or wrong answer – it’s up to each individual organisation to decide what risks they’re willing to take,” Mr Robinson said.