Artificial intelligence is no longer a future trend for Latvian businesses. It is already present in customer service, data analysis, content generation, and process automation across many sectors. AI tools improve efficiency and reduce costs, but they also create risks that many companies have not yet factored into their operations or insurance coverage. When an AI system causes harm to a client or third party, the liability often falls on the business that deployed it, regardless of whether the AI was built in-house or sourced from a third-party vendor.

What risks does AI create for businesses

AI adoption changes a company risk profile in ways that traditional insurance policies were not designed to address. The following categories represent the most common and impactful risks businesses should be aware of.

  • Professional errors and inaccurate recommendations. When a business uses AI to deliver advice, analysis, or recommendations to clients, an AI error can trigger claims for financial loss. The business remains liable in the same way it would be for a human error.
  • Data protection breaches. AI systems typically process large volumes of personal data. Misconfiguration, data leaks, or unauthorised access can lead to regulatory fines under GDPR and claims from affected individuals.
  • Cyberattacks targeting AI systems. AI platforms are increasingly attractive targets for cybercriminals. A successful attack can disrupt operations, compromise sensitive data, or manipulate AI outputs.
  • Intellectual property infringement. AI tools that generate text, images, or code may inadvertently reproduce protected material. If a client identifies such content, the business can face copyright claims.
  • Reputational damage. AI can produce inaccurate, misleading, or discriminatory content under a company name. Such incidents can cause lasting harm to brand reputation and client relationships.

An important point: even when a business uses a third-party AI solution, the liability towards its own clients usually remains with the business itself. This means insurance policies written before the AI era may no longer provide adequate protection.

Which insurance policies help manage AI-related risks

While a dedicated AI insurance product is still emerging globally, several existing insurance categories already cover a significant portion of AI-related exposures.

Professional civil liability insurance (PCTA) is one of the most relevant tools for businesses that use AI in service delivery. It covers client claims for financial losses resulting from professional errors or inadequate service, including cases where the error originated in an AI system. An IT company, a legal services provider, or a financial consultant using AI tools can protect itself with professional civil liability insurance against claims arising from inaccurate AI-generated advice or outputs.

General business civil liability insurance covers a broader range of third-party claims. If an AI system error causes harm to a third party and a compensation claim is filed, this policy can cover legal costs and settlement amounts.

Additionally, property insurance for IT infrastructure, servers, and hardware keeps the physical backbone of AI operations protected. In the event of a cyberattack or equipment failure, it can cover hardware replacement and restoration costs.

Businesses actively integrating AI into their operations should review their current policies with an insurance broker to check whether existing coverage aligns with the new risk profile. Agento advisors can identify gaps in protection and recommend the right combination of policies for your situation.

Contact an Agento advisor and find out whether your business is adequately covered in the age of AI.

Frequently Asked Questions

Do businesses in Latvia need insurance specifically for AI risks? There is no legal requirement, but businesses using AI in service delivery face real liability exposure. Existing civil liability policies can often cover AI-related losses, but it is advisable to check whether current coverage matches the new risk profile.
What does professional civil liability cover when AI is involved? Professional civil liability covers client claims for financial losses caused by professional errors or inadequate service, including cases where the error originated in an AI system used by the business to deliver that service.
What are the main risks for businesses using artificial intelligence? The main risks include professional errors in AI recommendations, data protection breaches, cyberattacks on AI systems, intellectual property infringement from AI-generated content, and reputational damage caused by inaccurate AI outputs.
Can small businesses be affected by AI-related cyberattacks? Yes. Cyberattacks are not limited to large organisations. Smaller businesses are often less protected and therefore a more accessible target. Using AI systems increases the attack surface regardless of company size.
How can a business protect itself against losses caused by AI errors? Key steps include establishing clear internal processes for AI use, maintaining human oversight on critical decisions, and reviewing existing insurance policies to confirm they cover AI-related risks. An insurance broker can help assess what protection is in place and where gaps exist.