Who's Liable When AI Gets It Wrong?

Artificial intelligence can generate impressive results in seconds, but it isn't responsible for the decisions made using its output.

Your business is.

Whether AI drafts a contract, prepares customer communications or analyses commercial data, responsibility ultimately remains with the organisation that chooses to rely on that information.

AI doesn't remove accountability

A common misconception is that mistakes caused by AI somehow become the software provider's responsibility.

In reality, if your business relies on inaccurate AI-generated information and suffers financial loss or causes loss to someone else, you may still be liable.

Examples include:

• Sending customers incorrect contractual information.

• Agreeing unsuitable contract terms.

• Publishing inaccurate pricing.

• Making decisions based on incorrect AI analysis.

  
  

The technology may have generated the content, but your business decided to use it.

Human oversight remains essential

One of the biggest legal safeguards is maintaining appropriate human review before making important decisions.

Businesses should have clear processes for checking:

• Contracts.

• Customer-facing communications.

• Legal documents.

• Commercial decisions.

• Compliance obligations.

  
  

AI should support decision-making—not replace it.

Develop clear internal policies

As AI adoption grows, businesses should establish internal guidance covering:

• Which AI tools employees may use.

• What information employees can enter into AI systems.

• When human approval is required.

• Record-keeping and accountability.

  
  

Simple governance can significantly reduce legal and commercial risk.

The bottom line

AI is a powerful business tool, but you can't delegate responsibility to technology. Businesses remain accountable for the contracts they sign, the advice they provide and the decisions they make, making proper oversight more important than ever.