Memo · Insurance Law
Memo: reviewing professional indemnity, cyber and D&O wordings for AI exclusions and "silent AI" exposure
An original memo structure for reviewing a client's PI, cyber and D&O programme for how it treats AI-related losses: express AI exclusions, silent AI, definitions, sub-limits, notification and disclosure, with a findings table and recommendations for renewal.
- Kind
- Memo. An internal or advice memo.
- Where it applies
- Australia
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 17 October 2026
- Status
- Maintained. Checked on 17 October 2026 against the 3 authorities it cites, for Australia.
- Version
- 1
- Source
- Written for this library
When to use it
Use when advising an insured business (including a law firm) or a broker on whether its insurance programme responds to AI-related claims and losses, typically before renewal or after adopting significant AI tools. Adapt for an insurer reviewing its own wordings.
How AI may be used
AI may scan wordings for AI-related terms, exclusions and definitions and build the comparison table, but whether a particular AI-related loss falls within cover is a matter of interpretation for the lawyer.
AI may
- Search each wording for AI-related terms, technology exclusions and relevant definitions
- Build a side-by-side table of the programme with clause references
- List questions for the broker or insurer about intent and endorsements
AI must not
- Must not conclude that a loss is or is not covered
- Must not treat the absence of the word "AI" as meaning a loss is covered or excluded
- Must not be given confidential policy wordings in a tool whose terms allow training
The lawyer checks
- The wordings reviewed are the current wordings, schedules and endorsements
- Each scenario is analysed against the actual words of each policy
- Renewal disclosure advice reflects the client's actual AI use
- Recommendations are practical and prioritised
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
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