Solicitors

Demonstrating responsible use of AI to your insurers

Sam Pye 09 July 2026

AI adoption is a cross-professional governance, regulatory and insurance issue. Legal services are set to become the first sector brought into the government’s new AI Growth Labs, announced by Justice Secretary David Lammy on 8 June.

Framed as an advisory sandbox to speed up the development and deployment of AI, the initiative is intended to help innovators navigate existing regulation with greater confidence. By tackling cross-regulatory challenges, exposing unintended barriers and shaping a clearer view of effective AI oversight in practice, it sends a strong signal: AI in the legal sector is moving rapidly from theory to real-world application.

The Royal Institute of Chartered Surveyors (RICS) has already made responsible AI governance a formal professional expectation for its members and regulated firms. Meanwhile, recent volatility in listed insurance broker share prices, following the launch of AI-enabled personal lines tools, demonstrates how quickly AI can reshape perceptions of risk and disruption in the market. The direction of travel is clear. For professional firms, the question is no longer whether AI is relevant, but whether they can show insurers and other stakeholders that its use is appropriate, properly governed, understood and controlled.

To provide assurance to underwriters during your professional indemnity insurance (PII) renewal, you should be able to evidence a careful, risk managed approach to AI adoption and explain how it will be used in the provision of professional services to your clients. Insurers are particularly interested to understand the journey your firm has gone on in adopting AI tools, in deciding which tools to use and for what purpose, what training has been and continues to be provided, and the governance and oversight regime that has been put in place to ensure you meet regulatory requirements.

Key areas to address for insurers

1. Scope and purpose of AI

Clearly define where and how AI is used in your firm, distinguishing between routine, low-risk tasks (such as low-risk administrative tasks) and higher-risk functions (such as decision support for professional legal advice, undertaking legal research or for critical systems).
Explain how AI is integrated into your processes, i.e. whether it is fully embedded or used for specific tasks. If possible, record AI inputs and outputs.
Where appropriate, inform clients about AI involvement and what this means to them.

2. Governance and oversight

Establish robust internal policies and risk frameworks governing AI use, ensuring these are regularly updated as technology and its applications evolve.
Assign clear accountability for AI outcomes, ensuring a human always reviews and approves important outputs, particularly those with legal or regulatory implications. If your working practices and AI policies allow for non-human oversight, then it is imperative that insurers are made aware of this and have opportunity to understand the safeguards you have in place.
Demonstrate compliance with relevant regulatory requirements and guidance.
Have an acceptable use policy which covers when AI can be used, in what context and by who. Miller can review your existing policy, or provide some exemplar templates, which can provide a starting point if you do not already have a policy in place.

3. Data privacy and cyber security

Detail how you protect client confidentiality and data integrity, complying with UK GDPR and related standards.
Specify if AI tools are used in closed systems or if data is processed or stored externally, particularly when using third-party tools.
Address how you select and monitor vendor practices (especially regarding data ownership, handling and security), and mitigate cyber risks associated with external AI providers.

4. Staff training and supervision

Ensure all personnel using AI receive comprehensive training on both the opportunities and risks, including how to check for errors and prevent overreliance on AI-generated content.
Emphasise ongoing education and supervision to maintain high standards of competence and care.

5. Vendor contracts and liability

Understand and disclose the limitations of liability in contracts with AI vendors, as these may affect the insurer’s recovery rights in the event of a claim related to faulty AI.
Review and adapt your insurance arrangements to reflect any contractual restrictions on liability with software suppliers.

Sector specific considerations

Law firms

AI is increasingly used to automate routine tasks, accelerate legal research including case analysis, streamline document review, drafting, and document comparisons. Risks include AI “hallucinations”, breaches of confidentiality, IP infringement, and contractual breaches. Firms should monitor all AI outputs, obtain client consent for AI use where relevant, and ensure human oversight before any legal advice is given.

CLC-regulated law firms

Many firms regulated by the Council for Licensed Conveyancers (CLC) are leading the way in the introduction of innovative technology solutions allowing AI to increasingly streamline conveyancing and probate work. The CLC has also joined the government’s AI Growth Lab, collaborating with regulators to safely test novel AI products. Risks include lack of human oversight, AI “hallucinations”, data breaches and other regulatory non-compliance.

Construction professionals

AI is used for project management, material compatibility checks, and property valuations. Controls must ensure AI recommendations are validated against regulations, real-world data, and professional judgement, with processes for reviewing all outputs for compliance and safety.

Accountants

AI supports audit and financial reporting, but risks include misinterpretation of standards, undetected misstatements, and ethical concerns. Human oversight and strict process verification are essential.

Insurance professionals

AI helps to support the risk assessment for both brokers and underwriters, but it is key to ensure that the information being presented in the consideration of risk is accurate and free of AI driven opinion as this could constitute a misrepresentation.

Data privacy and loss of privilege

Entering confidential client or privileged material into open-source or consumer-grade AI models constitutes a breach of confidentiality. It can permanently waive legal professional privilege. Miller has guidance on this, produced in conjunction with HF Law, read the article here.

Best practice in AI risk management

Maintain up-to-date, detailed AI policies.
Monitor AI system performance, including those supplied by third parties.
Train all staff, including senior management, in AI risks and oversight.
Ensure all departments understand specific risks relevant to their work, such as IP issues in legal practice or data security vulnerabilities.
Regularly review and adapt your risk management as AI tools and insurer expectations evolve.

Engagement with insurers and brokers

Collaborate with your insurance broker to present a clear, positive AI risk profile.
Stay informed about emerging insurer questions and evolving insurance products as the AI landscape develops.

AI brings efficiency and innovation but also introduces new risks. A proactive, transparent, and well-governed approach to AI risk management will reassure underwriters and support successful PII renewal. Remain vigilant as the legal and regulatory environment around AI continues to evolve, and tailor your approach to your sector and specific business activities.