Is Not Using AI Becoming a Professional Liability Risk?

The standard for “reasonable diligence” may be changing faster than many risk programs realize.

If a tool can scan hundreds of pages, cross-check information, and flag potential exposures in minutes, what happens when you choose NOT to use it?

That is becoming an important question for risk managers, brokers, general counsel, CFOs, and other professionals responsible for diligence.

For decades, reasonable diligence has meant doing what a competent professional could reasonably be expected to do with the tools and information available. But that standard changes as technology changes.

AI may be the next shift.

The Diligence Bar Is Moving

AI tools can already help professionals review policies for inconsistencies, analyze contracts for risky language, compare coverage with operations, and identify patterns across large amounts of information.

They do not replace professional judgment. But they can dramatically increase how much information a professional can reasonably review.

That raises a new question:

If a tool could have helped you identify an exposure, should you have used it?

The legal profession is already wrestling with this issue. In May, Massachusetts Lawyers Weekly reported that attorneys could eventually face malpractice claims for failing to use AI as expectations around professional competence evolve. Legal experts emphasized that there is not yet an established standard requiring AI, but compared its evolution to technologies such as email that eventually became routine parts of professional practice.

The other side of the risk is already much clearer.

In June, a federal judge in Mississippi disqualified four attorneys after lawyers on both sides of a case relied on AI-generated legal research that included fabricated citations. The court made clear that professionals remain responsible for verifying AI-generated work.

Together, these developments point toward a middle ground: the emerging expectation may not simply be to use AI, but to use available technology responsibly, with appropriate human oversight.

What Does That Mean for Risk Management?

Consider an organization renewing a professional liability, D&O, or public officials’ policy. A claim later reveals an exposure that a readily available review tool could have flagged.

Or a company approves a major vendor contract without using tools capable of quickly identifying problematic indemnification language.

The question after something goes wrong may no longer be only:

“What did you review?”

It may also be:

“What tools were available to you, and why didn’t you use them?”

“We did it the way we always have” becomes a weaker answer as better tools become commonplace.

AI Changes the Floor, Not the Ceiling

AI should not decide what risk your organization accepts. It should not decide whether you bind coverage, sign a contract, hire someone, or walk away from a client.

Those decisions still require human judgment.

What may be changing is the floor for reasonable diligence.

Organizations need processes that use technology appropriately, keep humans accountable, document what was reviewed, and can be repeated consistently.

That is part of the work behind RiskVersity’s Fractional Risk Officer engagements. We help organizations build risk-management processes that are documented, repeatable, and defensible, not simply faster.

If you are not confident your current diligence process could withstand scrutiny after something goes wrong, it is worth examining that process now rather than explaining it later.