Artificial intelligence has moved fast. One moment it felt experimental, the next it became embedded in everyday agency workflows, sometimes by choice, sometimes by client expectation.
From ideation and copywriting to image creation, video production and audience analysis, AI is now part of how many agencies deliver work. But as reliance grows, so does an uncomfortable question:
When AI gets it wrong, who carries the responsibility?
Where liability becomes unclear
Consider the potential fallout if:
Is liability with the agency, the client, or the AI provider? Legally, that line is still forming, but for agencies, the exposure already exists.
Is AI increasing professional risk?
Most UK agencies now use generative AI in some capacity, whether internally or as part of client deliverables. Tools such as ChatGPT, Midjourney, Runway and Adobe Firefly bring obvious advantages: speed, scale and efficiency.
What’s harder to control are the new risks that sit alongside those benefits.
Copyright and intellectual property concerns
AI systems generate outputs based on existing data. That raises fundamental questions:
When originality is challenged, it’s often the agency that finds itself answering difficult questions.
Defamation and reputational damage
If AI-generated content harms a third party’s reputation and slips through review, the consequences can go far beyond embarrassment.
These are all realistic outcomes, especially where speed has been prioritised over scrutiny.
Data protection and confidentiality risks
AI tools learn from user inputs. Even where platforms claim safeguards, no system is completely risk-free.
Uploading sensitive, personal or client-owned data can expose agencies to:
Particularly if public tools are involved.
Professional negligence still applies
If AI informs strategic, creative or analytical decisions that later prove flawed, clients are unlikely to blame the algorithm. From their perspective, AI is part of your delivery model. You selected it, configured it and relied on it. That means accountability still sits with the agency.
When AI shifts from tool to decision-maker
Historically, agencies were liable for their outputs, not the tools they used. AI challenges that distinction. If a copy tool unintentionally plagiarises a slogan, or a media-buying algorithm breaches advertising or equality rules, the claim won’t land with the software provider. It will land with you.
What UK insurance currently says about AI
Most UK Professional Indemnity (PI) policies cover negligence arising from professional services, but few reference AI directly.
In practice, this means claims may still be covered, provided insurers believe the agency exercised reasonable skill and care. The risk lies in how “reasonable” AI reliance is interpreted after the fact.
That subjectivity is where disputes often begin.
How insurance wordings may evolve
As insurers start to experience AI-related losses, policy language is likely to tighten. Potential developments could include:
Agencies that can evidence controls and processes will be better placed than those that cannot.
Practical steps agencies can take now
While regulation and insurance evolve, there are sensible actions agencies can take today:
These steps don’t remove risk, but they demonstrate care, which matters when claims arise.
Staying ahead as insurers catch up
AI is no longer a fringe exposure. Insurers are beginning to treat it as a core operational risk.
Agencies that recognise this early and align their processes, contracts and insurance accordingly, will be in a far stronger position as the market adjusts.
AI may be transforming how agencies work, but accountability hasn’t changed. If you’re unsure how your current policies cover AI-assisted work, now is the time to review it. Speak to our team to understand where risk sits today and how to protect your agency as technology continues to evolve.
Photo by Steve Johnson on Unsplash