FCA authorised · FRN 724952 0117 325 0027Quote & buy →
Aipedia: Company formation and secretarial agents
AI tools can screen a proposed company name against the register and trade mark databases, but a missed conflict can leave a client with a forced name change or a passing-off claim. Whether the agent is liable depends on what it promised to check.
Part of: AI in Company formation and secretarial agents
In short
Formation platforms and agents use AI to test name availability, suggest alternatives and screen for similar trade marks. Availability at Companies House is not the same as freedom to use a name, and AI similarity checks can miss phonetic, translated or stylised conflicts. A client who has to rebrand after an objection or a rights holder's claim may look to the agent if it said the name was clear. PI may respond to the client's negligence claim, subject to the wording and the services declared. IP infringement claims made directly against the agent raise separate cover questions.
Choosing a name is often the first conversation with a new client, and AI may be used at several points in it:
A name that can be registered is not necessarily safe to trade under. The register check answers one question; trade mark and passing-off risks are different questions that need judgement.
Name checks sit alongside the other incorporation tasks described in AI in company formations.
No regulator has published AI guidance for name checking. The duty is the ordinary one of reasonable care and skill under section 13 of the Supply of Goods and Services Act 1982 for business clients, and section 49 of the Consumer Rights Act 2015 for consumers, many of whom buy formations online.
The scope of that duty depends heavily on the terms of the engagement. An agent that says only that a name is available on the register has promised less than one that describes a name as cleared. AI-generated summaries tend to use confident language, which can quietly widen what the agent appears to have promised. Online platforms should make the scope of the check clear before the customer pays, not bury it in the terms.
Illustrative scenario: a client asks an online formation service whether a brand name is safe to use. The platform's AI tool reports no conflicts, and its summary says the name is clear for trading. The tool missed a registered trade mark spelled differently but sounding the same, covering the same services. After launch, the rights holder sends a letter before claim. The client has to rebrand, replace signage and stock and pay its own legal costs, and argues that the platform's statement was negligent.
A related problem is an objection to the company name itself, which can lead to an order to change it. AI-generated alternative names can also infringe without anyone checking, especially where they echo well-known brands.
A client's claim that the agent negligently cleared a name is a professional negligence claim, which PI commonly covers, subject to the policy terms and to name or trade mark searching being within the declared services.
An infringement claim brought directly against the agent, for example over a name or logo the agent's tool generated, raises different questions. Some PI wordings include intellectual property infringement cover and others restrict it. For how AI-generated content sits between PI and cyber policies, see AI-generated content and IP infringement. The wider position is in does formation agents' PI cover AI errors?.
These steps keep name checks within what the agent can stand behind:
Apex arranges PI for formation agents and online formation platforms. A broker checks whether name and trade mark searches are within your declared services and how IP claims are treated under your corporate services PI.
No. Availability on the register shows that an identical or very similar company name is not already registered. Trade mark rights and passing-off are separate risks, and a client can face a claim even after a successful registration.
It depends on what the agent promised. An agent that checked register availability has a narrower duty than one that told the client the name was clear. Precise engagement terms and careful wording in AI summaries reduce the risk.
A client's claim that the agent was negligent in checking a name may fall within PI, subject to the wording. A claim alleging that the agent itself infringed a mark is different, and cover depends on whether the policy includes intellectual property infringement.
It can, but generated names can echo existing brands or registered trade marks without anyone noticing. Run a generated name through the same register and trade mark checks as any other proposal, and do not present it as cleared until a person has reviewed the results.
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.
