May 2026
Who carries the AI risk?
If consultants use artificial intelligence in their work, who is responsible when something goes wrong? This is a question the team at Planned Cover is hearing more often.
Planned Cover supports design professionals in the built environment with risk management solutions that cover business, career and personal lives.
“Most current professional indemnity policies were not underwritten with AI in mind,” says Cos Cirocco, National Business Manager and South Australian State Manager with Planned Cover.
“This means that coverage in respect to AI induced claims is still unclear. Unless your policy specifically addresses the use of AI tools, you are probably sitting in a grey area.”
Cyber insurance offers no safety net either. “Cyber Insurance focuses on privacy breaches under the Privacy Act, data security incidents and cyberattacks. It is not designed to provide cover for professional negligence claims arising from AI-generated advice or work.”
In practice, that means the risk sits squarely with the consultant.
Planned Cover has developed a new Practice Guide to provide a general overview of some common questions that professionals in design, engineering and advisory might ask.
Insurance is only part of the picture. The deeper issue is liability.
“As a rule of thumb, think of generative AI as being akin to a junior employee,” Cos explains. “The risk and responsibility for its work are carried by your business and are very difficult to delegate to others.”
“However, unlike your staff, AI does not have a moral conscience or sense of accountability, and does not know when it is giving you false information.” This makes it critical to put in place robust systems for qualified human staff to check its output.
The guide also flags less obvious risks. Feeding project information into AI tools can raise confidentiality, privacy and intellectual property concerns. Without clear internal policies, “shadow AI” – informal, unmanaged use by staff – is already emerging.
There is some reassurance.
“While there are ambiguities in cover, few professional indemnity policies currently contain express exclusions,” Cos notes. “With proper human verification and careful handling of data, there is nothing to stop businesses enjoying the efficiencies AI can create.”
Planned Cover provides a full circle of support, offering advice, insurance and representation for profession-specific protection in the built environment industry. Learn more.