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Using AI Tools in Your Business? Like anything there’s risks as well as rewards

  • Adroit Insurance and Risk
  • September 9, 2026

AI can save time and cut costs for business owner, using the ai tool like ChatGPTor a specialised ai system has risks if the ai tool gets it wrong.

It has never been easier to access and use ai tools or build your own. The technology may be new; the risks are mostly the same, breach of IP, incorrect sales advice, breach of privacy from a Chatbot missing safeguards or an internal failure from an ai tools that’s not noticed or checked.

The main issue with ai id the speed and exponential impact of the issue. A person may have made mistakes processing before it was caught, an ai tool without checks can process hundreds or thousands of requests before the issue is noticed.

The important point for business owners is simple: no matter how the work is done, your legal obligations to customers, suppliers and compliance with laws remains with the business, regardless of whether an ai tool was involved.

The law does not give AI a free pass

Australian Consumer Law has long-standing protections against misleading or deceptive conduct, and those protections still apply when an AI system is doing the talking. There is no exemption for a mistake made by a chatbot rather than a person. A widely reported overseas case shows how this plays out in practice. An airline’s customer service chatbot gave a passenger incorrect information about bereavement fares. In 2024, a tribunal found the information was misleading and ordered the airline to compensate the customer. The business, not the chatbot, was held responsible.

Where the risks show up

The exposure is not limited to chatbots. A few common examples:

  • Customer-facing chatbots may give wrong prices, terms or advice, which can mislead customers and trigger a claim.

  • Marketing and social content generated by AI can misrepresent a product, or imply a human endorsement that does not exist.

  • Paperwork and order processing handled by AI can misquote prices or mishandle orders, and errors can be costly.

  • Governance and reporting obligations, including those under the Corporations Act, still apply. AI output needs to be overseen by a person with the right expertise.

If something goes wrong, who pays?

Business owners often assume that if a supplied AI tool fails, the developer or technology provider will be liable. In an ordinary supply arrangement, liability is governed by the contracts between the parties, it often limits the liability of the supplier and makes the user responsible.

Managing the risk

  • Keep a human in the loop. Review AI output before it reaches customers, particularly on pricing, advice and claims about your products.

  • Check the contract terms of any AI tool you use, so you understand who is responsible if it fails.

  • Document your oversight. Keep a record of how AI decisions are checked and by whom, which supports your governance obligations.

  • Review your insurance. AI-related exposures can fall between traditional policies, so it is worth checking where your cover responds.

Where insurance fits

AI is still an emerging area for insurance, talk to your insurance adviser about how you plan to use ai and the key risks if the ai gets it wrong, your insurer may need to be advised to ensure cover remains in place. Typical insurance policies that may offer cover include:

  • Cyber cover generally focuses on data breaches and network attacks rather than harm caused by an AI decision.

  • Professional indemnity may respond where there is a breach of IP, incorrect advice is provided, which cases a financial loss. Policy wordings vary and may not clearly extend to ai technology use.

  • Management liability can be relevant where directors face regulatory action over governance failures or loss of funds paid to the wrong accounts.

Talk to your Risk Adviser

If your business uses AI tech such as ChatGPT or similar public tools, it’s worth understanding where your legal and financial exposure sits and confirm that your current insurance policies are still adequate. Speak with your Insurance Adviser, who can review your risks with you and recommend cover suited to your needs and budget.