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Aipedia: Claims management companies
CMCs can use AI chatbots to sign up claimants, but the firm is responsible for every answer the bot gives about fees, cancellation and outcomes. Misleading fee answers are a fast route to complaints and refunds.
Part of: AI in Claims management companies
In short
Generative AI chatbots may be used to qualify and sign up claimants, answering questions about fees, cancellation and likely compensation. Everything the bot says is part of the firm's pre-contract communication and falls under the Consumer Duty. The FCA and SRA have said termination fees must be reasonable, proportionate and itemised, and the FCA expects a non-AI route for vulnerable customers. Fee refunds and fines caused by bot misinformation are not usually covered by PI, but a consumer's loss from wrong claim information may be, subject to the wording.
A website or messaging chatbot may be the front door for a claims firm. It asks qualifying questions, explains how the service works, quotes the fee, collects identity details and walks the consumer through signing the agreement. Generative AI chatbots can answer free-text questions such as "how much will I get?" or "can I cancel?", which is where most of the risk sits. Unlike a fixed web page, the answer can change from one conversation to the next.
CMCOB sets out what a CMC must tell consumers before they enter an agreement, including information about fees. Check the current CMCOB text in the FCA Handbook or with your compliance adviser for the detail. Whatever the precise rule, a chatbot that summarises or paraphrases fee terms becomes part of the firm's pre-contract communication, and inconsistencies between the bot and the written agreement are likely to be resolved against the firm.
Fees are a particular focus. The FCA and SRA said in a joint message in February 2026, as reported, that termination fees must be reasonable, proportionate and itemised, and that firms should explain them clearly. A bot that says "no win, no fee" without mentioning termination charges is a clear risk. See AI fee calculations and termination charges.
Many consumers could pursue complaints to financial firms and the Ombudsman themselves without charge. Making that clear is a common part of fair onboarding.
Illustrative scenario. A CMC's chatbot is asked by a consumer whether they can cancel later. It says cancellation is free at any time. The written agreement contains a termination charge once work has started. Months later the consumer cancels, receives an invoice and complains. Searching the chat logs, the firm finds the bot has given the same answer hundreds of times. It decides to waive the charges and contact affected consumers, at significant cost.
It depends on the loss and the wording. Waiving or refunding your own fees because a bot misdescribed them is not usually a PI loss, and nor are regulatory fines or the cost of a customer contact exercise. Where a consumer relies on incorrect information from the bot about their claim, such as a deadline or whether they have a case, and loses out, a PI policy may respond if held, subject to the terms. Some wordings treat chatbot output as part of the firm's professional services; others are less clear. Our guide to AI chatbot insurance explains the gaps, and Does claims firm PI cover AI errors? covers CMC wordings.
Apex arranges PI for claims management companies and can check whether your policy treats chatbot and automated advice as part of your professional services. See AI in claims management.
In practice the firm is responsible for what its chatbot says. The FCA says firms remain responsible for consumer outcomes from AI. Inconsistencies between the bot and the agreement are likely to cause complaints and may be resolved in the consumer's favour.
Explaining that consumers can often complain to firms and the Ombudsman themselves without charge supports informed decisions under the Consumer Duty. Check the exact disclosure requirements in CMCOB with your compliance adviser.
Usually not. Refunding or waiving your own fees is commonly outside PI, as are regulatory fines. PI may respond if a consumer suffers a real loss by relying on wrong information about their claim, subject to the wording.
Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.
Start a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.
