AI Law Firm Buys Malpractice Insurance for Its AI Agents
Crosby, an AI-powered law firm, has secured malpractice coverage for its AI agents, exposing a coverage gap insurers are still scrambling to address.
An artificial intelligence law firm called Crosby has taken an unusual step in the emerging landscape of legal technology: purchasing malpractice insurance specifically for its AI agents. The move has drawn attention from legal and insurance industry observers as it highlights a question that neither sector has fully answered — who bears liability when an AI system makes a professional error.
Traditional malpractice insurance is designed to protect human attorneys against claims of negligence or error in legal work. As AI agents take on increasingly substantive legal tasks, from drafting contracts to conducting research, the question of whether those systems require their own coverage has moved from theoretical to pressing. Crosby's decision suggests at least one firm believes the answer is yes.
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Major insurers are still working through how to assess and price the risks associated with artificial intelligence in professional services. The challenge is significant: AI systems can produce confident-sounding but factually incorrect outputs, a phenomenon sometimes called hallucination, and courts have already sanctioned attorneys who submitted AI-generated filings containing fabricated case citations.
The gap in coverage that Crosby's purchase exposes is emblematic of a broader tension across industries as AI tools are deployed faster than regulatory and insurance frameworks can adapt. Legal malpractice insurers have historically priced risk based on the track record and judgment of human professionals — criteria that do not translate cleanly to autonomous software systems.
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