Like much of the business world, the insurance industry is rapidly evolving as agencies and carriers begin to embrace and understand optimal use of artificial intelligence (AI). These new advancements can help companies automate and streamline operations, improve customer service and gain a competitive edge. However, they may also introduce new errors and omissions (E&O) risks that must be managed responsibly.
How AI Is Changing the Insurance Industry
AI and automation are transforming many aspects of insurance, from quoting and underwriting to claims processing and customer communications. Many agencies have started leveraging chatbots, automated policy management systems, and data-driven analytics to enhance efficiency and accuracy. However, as these tools become more integrated into daily workflows, they can also create unique professional liability risks.
Emerging E&O Risks for Insurance Agencies 
With increased reliance on AI technology, new E&O exposures may arise, including:
- Algorithmic errors—Automated systems may misinterpret data or apply incorrect rules, leading to inaccurate quotes, policy recommendations or coverage gaps.
- Data privacy and security issues—AI tools often process sensitive client information. A breach or misuse of data can result in regulatory penalties and client claims.
- Lack of human oversight—Overdependence on automation may reduce opportunities for agents to catch errors or clarify complex coverage needs.
- Inadequate documentation—Automated communications and transactions may not always provide a clear record, complicating claims defense if disputes arise.
Address New Risks in a Changing World
If your agency is adopting AI or automation, now is the time to review your E&O insurance policy and risk management strategies. At U.S. E & O Brokers we’re well-equipped to help you assess your needs and secure appropriate coverage.
Contact us today to learn more about how we can help you stay ahead of emerging risks and safeguard your reputation.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.