Artificial intelligence (AI) is transforming construction – driving efficiency, cutting costs, and accelerating project delivery. Yet with every new opportunity comes risk. Without proper oversight and robust risk management, AI tools can just as easily create liabilities as they can solve problems.
That’s why understanding the impact of AI on your Professional Indemnity Insurance (PII) is no longer optional – it’s essential.
How is AI transforming construction?
Construction projects are inherently complex – so it’s little surprise the industry has been an early adopter of digital technologies. AI is no exception, with construction professionals embracing the power of AI tools to streamline projects and enhance decision-making across the board.
From planning to delivery, AI is playing a role throughout the lifecycle of construction projects. Common applications include:
Smarter design – AI can augment building information modelling (BIM) by merging data sets and models to optimise layout, height, light levels, sustainability, and more.
Faster paperwork – from compiling bids to drafting emails, reports, planning applications, and fee proposals with text-generation tools.
Optimised scheduling – predicting potential delays and cost overruns, while keeping construction timelines on track.
Streamlined procurement – analysing data to forecast needs and recommend optimal supply chain strategies.
Safer sites – flagging design errors, hazards, and equipment misuse before they escalate.
Proactive maintenance – scheduling equipment servicing and forecasting failures to minimise downtime.
Yet for all its benefits, AI is not without risk. For construction firms, the question is not how to make use of AI – but how to harness the benefits while avoiding exposure to new liabilities.
What are the risks of AI use?
Much like the humans that build them, AI models aren’t perfect. While they may be adept at reading or interpreting data sets, AI tools are still capable of errors, and often misunderstand context or societal needs. Incorrect assumptions, hidden biases in the models’ training data, or even a lack of data altogether can also give rise to ‘hallucinations’.
Ultimately, this can lead to outputs that are unreliable, impractical, and even unsafe. For example:
An AI tool may produce an aesthetically pleasing architectural design, but neglect practical considerations such as emergency exits or accessibility requirements.
While certain materials may be safe to use in isolation, an AI tool may fail to recognise that they can’t be used in conjunction, due to chemical or physical interactions.
Without the appropriate governance policies, risk mitigation, and qualified personnel in place, these issues can have severe consequence. Errors may lead to project delays and introduce additional costs – especially if not discovered until later in the construction process. For the professional involved, it can lead to financial and reputational harm. If they are found to have been negligent in their duties (by relying upon AI tools that produced negligent design), they could also be subject to claims against their PII.
How AI impacts your PII cover
PII claims are often long-tail, meaning there can be a substantial gap between when an incident occurs and when a claim is made. While AI-related PII claims haven’t yet emerged, these technologies are still new – and the risk of future claims cannot be dismissed. Underwriters are taking notice, increasingly asking questions around how firms are using AI and, in many cases, requesting to review any existing AI policies.
It is highly recommended that firms who are incorporating AI into their operations draw up a clear usage policy – to set out protocols, ensure human oversight, and establish accountability should something go wrong. It should be regularly reviewed and updated as new risks emerge. That policy should be understood as one component within a broader framework adopted across the business – embedding governance, accountability, and oversight at every level.
Firms must also recognise that AI misuse may not only expose them to professional negligence claims. They could find themselves in breach of wider laws and regulations such as the EU AI Act, data protection and privacy regimes, or sector‑specific compliance requirements.
Talk to us
With any new technology, early engagement with insurers is essential. At Lockton, we help clients craft PII renewal submissions that showcase their AI strategy and risk management approach. To learn more, reach out to a member of our team.
Visit our Construction Professionals (opens a new window) page for further insights.
