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Aipedia: Claims management companies
Claims management companies can use AI, but the FCA applies its existing rules, so the firm stays responsible for every claim, complaint and promotion. That matters because the Ombudsman has publicly criticised inaccurate AI submissions and the FCA is studying the whole market.
Part of: AI in Claims management companies
In short
There are no AI-specific rules for claims management companies. The FCA relies on the Consumer Duty, record keeping and SM&CR, and its October 2026 good-practice page says firms remain responsible for AI they deploy or outsource. The Financial Ombudsman Service has reported AI-assisted submissions of around 200 pages with many errors, and the FCA launched a market study of claims management services in May 2026. PI is compulsory only for personal injury CMCs under CMCOB 7.4. Elsewhere it is voluntary, and fines and fee refunds commonly sit outside cover.
Claims management is a high-volume, document-heavy business, which makes it an obvious place for AI. Firms that handle financial services, personal injury, housing disrepair, employment and other claims may use AI across the claim lifecycle:
Each of these touches a regulated activity. Since 1 April 2019 the FCA has regulated claims management activity in Great Britain, with conduct rules in the Claims Management: Conduct of Business sourcebook (CMCOB). Law firms acting as professional representatives in high-volume consumer claims are regulated by the SRA, and the ICO oversees the personal data that drives the whole model.
There is no CMC-specific AI rule or guidance. The FCA's page "AI and the FCA: our approach" (first published 8 September 2025, last updated 2 October 2026) says: "We do not plan to introduce extra regulations for AI." It names the Consumer Duty and the Senior Managers and Certification Regime (SM&CR) as the key frameworks.
On 19 October 2026 the FCA published "AI in financial services: good practice and areas for improvement". It creates no new requirements, but it is direct about accountability: firms deploying AI "remain responsible for consumer outcomes", and firms "can outsource AI services, but remain responsible for them". It asks firms to map AI responsibilities to senior management functions and keep auditable records. It is not aimed at CMCs specifically, but nothing in it excludes them.
The duties AI most often engages are:
Our guide to FCA AI rules for claims firms covers each publication in more detail, and our Consumer Duty explainer sets out PRIN 2A for professional firms.
These sit on top of the FOS case fee for professional representatives, in place since 1 April 2025: £250 per referral after 10 free cases a year, with £175 refunded if the complaint is upheld.
Professional indemnity insurance is only compulsory for CMCs that handle personal injury claims. Under CMCOB 7.4, those firms must hold PI with at least £250,000 for any one claim and £500,000 in aggregate per year, with an excess of no more than £10,000 per claim, defence costs included and cover for claims arising from circumstances notified in the period. CMCOB 7.4 contains no reference to AI.
Other CMCs, such as financial services and housing disrepair firms, face financial resources requirements under CMCOB 7.2 instead of a PI requirement, so PI is voluntary. Some may still buy it, because clients, partner law firms and referrers can bring negligence claims.
Many PI wordings may say nothing specific about AI. Where that is the case, a claim caused by an AI-assisted error is usually treated like any other negligent act, error or omission, subject to the policy terms. Fines, fee refunds and the cost of regulatory remediation commonly fall outside cover (see fines and penalties exclusions). More in PI insurance for AI-using professionals and does PI cover AI mistakes?.
Apex arranges PI for claims management companies, including the compulsory cover personal injury CMCs need. A broker can review your wording, explain how it treats AI-assisted claim work, and help you set out your AI controls for insurers.
No. The FCA says it does not plan to introduce extra regulations for AI, and it has published nothing AI-specific for CMCs. The Consumer Duty, record-keeping rules and SM&CR apply, and its October 2026 good-practice page confirms firms remain responsible for consumer outcomes when they use AI.
Only for firms that advise on, investigate or represent personal injury claims. CMCOB 7.4 requires at least £250,000 any one claim and £500,000 in aggregate, with an excess of no more than £10,000. Other CMCs must meet financial resources requirements under CMCOB 7.2 instead.
The Market Study Notice published on 19 May 2026 does not mention AI. It covers the supply of claims management services, including professional representatives and lead generators, and the acquisition, use and sale of consumer data. Many of those activities can involve AI, so the findings, due by 18 May 2027, may still affect AI use.
The FOS has said AI-assisted submissions from professional representatives can run to around 200 pages with multiple inaccuracies, and the Chief Ombudsman reported one case where 37 of 39 references were wrong. It has asked the FCA for clarity on AI records, human escalation and AI-to-AI disputes.
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.
