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Aipedia: Management consultants
UK public buyers do not ban consultants from using AI to write tenders, but under PPN 02/24 and PPN 017 they can ask about it and must check AI-assisted bids. The bigger risk is an AI-written capability claim the firm cannot deliver.
Part of: AI in Management consultants
In short
Consultancies use AI to draft method statements, case studies and CVs for public-sector tenders. PPN 02/24 and its Procurement Act 2023 successor PPN 017 let authorities ask suppliers to disclose AI use through unscored questions, warn buyers about plausible but false statements and protect buyer data from AI training. PPN 017 is mandatory for central government departments, executive agencies and NDPBs. Once a contract is won, an overstated claim in the bid can become a misrepresentation or breach of contract allegation. PI may respond to some of these claims, depending on the wording, but contractual promises are often treated differently.
Public-sector bids are long, repetitive and deadline driven. Consultants use generative AI to draft answers to quality questions, adapt previous case studies, summarise team CVs and check compliance against the specification. Some firms build a library of past answers and let an AI tool assemble a first draft for each new tender.
The output can drift. A tool asked to make an answer stronger may add capabilities, accreditations or outcomes the firm never claimed, or merge case studies from different clients into one that did not happen. Over several bids, these statements can spread across the library.
Bid teams also use AI to tailor answers to a buyer's published strategy or evaluation criteria, which means pasting tender documents into the tool. That raises the separate question of what happens to the buyer's information once it has been uploaded, which PPN 017 contract terms may address.
PPN 02/24, issued in March 2024, does not prohibit suppliers from using AI to write bids. It says authorities should:
PPN 017, published on 17 February 2025, restates this for procurements under the Procurement Act 2023 started on or after 24 February 2025. It is mandatory for central government departments, their executive agencies and NDPBs. Contract terms may bar the use of buyer data to train AI without written approval. The ICMCI Code adds that CMCs should avoid unreviewed AI output (5.2) and be transparent about material AI use (3.3).
Illustrative: a consultancy uses an AI tool to draft a bid for a transformation programme. The tool describes the firm as having delivered a similar programme at a comparable body, combining two smaller projects, and lists a named team with skills one member lacks. The firm wins. Delivery struggles, the buyer reviews the bid and alleges it was induced to contract by false statements. It seeks to recover costs and threatens termination.
The firm's position is weaker if it cannot show who reviewed the bid, or if its answer to the buyer's AI disclosure question was inaccurate. A record of review and approval does not make a false statement true, but it helps show the error was a mistake rather than a deliberate overstatement, which can matter for both the dispute and the insurance position.
The buyer may frame this as misrepresentation, breach of contract or both. Separately, uploading the buyer's tender documents to an AI tool that trains on inputs could breach the contract terms PPN 017 envisages.
PI is designed for negligent professional services, not for statements made to win work. A claim that a firm misdescribed its own capability may fall outside cover, or be caught by exclusions for contractual liability, guarantees or dishonesty, depending on the wording. If the same contract later produces a negligent service claim, PI may respond to that. Breach of buyer data terms may sit with cyber cover. Public contracts also set PI requirements and audit rights; see insurance requirements for tenders and public-sector consultancy PI terms. Specific framework PI minimums were not verified, so read each tender.
Related: the ICMCI AI Code and AI implementation projects.
Apex arranges PI for management consultants and can check that your cover matches public-sector contract requirements before you bid. See the AI in management consulting overview.
Yes. PPN 02/24 and PPN 017 do not prohibit it. Authorities may ask you to disclose AI use, and they are told to check AI-assisted bids for plausible but false statements, so every claim should be verified before submission.
Under PPN 02/24 the Annex B questions are for information only and are not scored. Answer them accurately: an inaccurate answer could itself become an issue if the contract is later disputed.
Possibly not. PI targets negligent professional services. Claims about statements made to win a contract may fall under exclusions for contractual liability, guarantees or dishonesty, depending on the wording. Ask your broker how your policy treats misrepresentation claims.
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.
