AI in Consulting: Emerging Risk and Insurance Considerations

AI is reshaping how consulting firms deliver services and structure their teams. It is rapidly emerging as a top concern for both clients and insurers.

As adoption accelerates, AI is moving from experimental to essential in the consulting industry.

Consulting firms’ risk profiles are changing just as quickly.

Generative AI, Agentic AI, predictive models, and automated research platforms are now doing work once handled by large teams of consultants. The traditional “pyramid” model is giving way to a leaner “consulting obelisk”: smaller, more nimble teams, heavily supported by AI.

This shift creates real opportunity, but also new risk exposures.

From a professional indemnity insurance perspective, AI-generated advice can embed errors or bias that are hard to spot with fewer layers of human review. When an AI-enabled engagement leads to a client loss, questions arise. Is liability with the individual consultant, the firm, or the third party technology provider?

At the same time, AI-created deliverables heighten the risk of intellectual property disputes or inadvertent infringement, particularly as firms deploy proprietary tools and AI systems at scale.

Data governance and confidentiality risks also increase as more sensitive client data flows through AI platforms. These risks are amplified when consultants use unapproved third-party AI tools not properly vetted by the firm’s vendor management policies. These tools may store, reuse, or train on confidential data in ways that fall outside the firm’s controls and could breach client contractual obligations or data privacy laws.

Regulatory expectations around transparency, data usage, and ethical AI are also tightening globally, especially relevant for consulting firms serving clients in heavily regulated industries.

We are also starting to see publicly known matters, but the ultimate loss exposure remains unclear.

Use of AI in client-facing work is of particular interest to professional indemnity insurers. In light of the uncertain claims landscape, insurers are taking a cautious stance in respect to affirmatively adding AI coverage to professional indemnity and cyber insurance policies. However, during the renewal process, firms should be prepared to address their governance framework and use case policies relating to AI.

A consistent, methodical approach to AI integration into firm operation will be important. Aligning technology strategy with risk, legal, and HR, embedding clear governance into day-to-day client service delivery, and investing in staff training can help promote the ethical, measured and defendable use of AI.

Firms that evidence robust oversight, disciplined use of approved tools, and a well-documented environment will be better placed to manage these emerging exposures, engage constructively with insurers, and maintain the client trust.

Contact

The Professional Services Practice at Aon values your feedback. To discuss any of the topics raised in this insight, please contact Catherine Jones or a member of your Aon client service team.





Catherine Jones
Senior Vice President and Executive Director, Consulting Firm Leader
New York

About Aon

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