Aipedia: Management consultants

AI market sizing and forecasts: who's liable?

Aipedia, by the Apex broking team · Last reviewed 2026-10-27

A consultant who supplies AI-generated market sizes or forecasts is liable for them in the same way as figures built by hand. The risk grows when a client, lender or investor commits money on the strength of the numbers.

Part of: AI in Management consultants

In short

Consultants increasingly ask AI tools to estimate addressable markets, project demand and fill gaps in business cases. The tools can produce confident figures from weak or invented assumptions, and they rarely show their workings. The ICMCI AI Code requires meaningful human review and the ability to explain AI-assisted results (3.1), plus documentation (3.6). If a client or a third party such as a bank relies on a flawed figure, the claim is usually framed as negligence or negligent misstatement. PI commonly responds, subject to the wording, but third-party reliance and limits deserve attention.

How consultants use AI for sizing and forecasts

Market sizing has always mixed data with judgement. AI makes the first draft faster: a consultant asks a generative AI chatbot for the size of a niche market, the number of potential customers in a region or a growth rate, then uses AI inside a spreadsheet to build a top-down or bottom-up model. Business cases for funding rounds, grant applications and capital projects often include these numbers.

The weakness is provenance. A chatbot may give a market size that looks precise but blends unrelated sources, outdated reports or simple invention. If the consultant cannot trace the figure to a source, they cannot explain it, which is what ICMCI 3.1 now requires.

Forecasting adds a second layer. AI tools can fit a trend line to a short data series and extend it years ahead, or generate scenario ranges that look rigorous but rest on one unchecked growth assumption. Once those numbers are pasted into a board paper or investment memorandum, readers rarely see the caveats, and the figure takes on an authority it never had.

The duties that apply

ICMCI 3.1: meaningful human review and the ability to explain AI-assisted results.
ICMCI 3.6: accountability and documentation, which in practice means a record of assumptions and sources.
ICMCI 5.3: avoid over-reliance; AI does not replace professional competence.
Common law: reasonable skill and care in contract and tort. Where a consultant knows a third party will rely on a figure for a particular purpose, a duty may extend to that party under the Hedley Byrne principle.

The ICMCI Code does not alter the legal test, but it gives a claimant's expert a ready description of the checks a careful consultant would make.

What can go wrong

Illustrative: a consultant prepares a market assessment for a client seeking bank finance to open new sites. The addressable market comes from an AI chatbot's estimate, which in fact double counts two customer groups. The bank sees the report and lends. Demand falls well short, the client defaults, and both the client and the bank allege the market assessment was negligently prepared.

The client's claim is in contract and tort. The bank's claim depends on whether the consultant assumed responsibility to it, for example by allowing the report to be shared for lending purposes or signing a reliance letter. Forecasts are not guarantees, and a court will look at whether the method and assumptions were reasonable when made, not whether the outcome came true. An unexplained AI figure makes that argument harder.

How PI usually responds

PI for consultants usually covers claims alleging negligent advice, including negligent misstatement to third parties, subject to the policy terms. Points to check:

Whether the wording covers claims from third parties who were not your client and whether reliance letters need insurer approval.
Any exclusion for guarantees or warranties of financial outcome, which some wordings contain.
Whether your limit of indemnity reflects the size of decisions clients make on your numbers. See how much cover a consultant needs.
Whether the policy has any AI exclusion or condition.

No compulsory PI minimum applies to consultants, so contract terms usually set the limit.

Practical controls

Trace every key input to a named source a person has checked.
Keep an assumptions log and state ranges rather than single figures.
Run a sense check against an independent method.
Limit reliance in the report and engagement letter, and control who may see it.
Treat reliance letters as a separate decision and tell your broker.
Disclose AI use where it materially shaped the numbers (ICMCI 3.3).

How Apex helps

Apex arranges PI for management consultants and can review how your policy treats third-party reliance on forecasts and business cases. See the AI in management consulting overview.

Sources

Frequently asked

Am I liable if my forecast simply turns out wrong?

Not just because the outcome differs. The question is usually whether your method, data and assumptions were reasonable at the time. An AI-generated figure you cannot trace or explain makes that harder to show, so keep sources and assumptions on file.

Can a bank or investor sue me if they were not my client?

Possibly. A duty can arise where you knew a third party would rely on your figures for a particular purpose, such as lending, especially if you signed a reliance letter. Engagement terms that limit reliance help, but are not always conclusive.

Does PI cover claims from third parties?

Consultants' PI policies may cover legal liability to third parties for negligent professional services, subject to the wording. Some restrict claims under reliance letters or contractual guarantees, so check with your broker before giving third parties rights to rely on your work.

Check your PI covers how you use AI

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.

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Apex 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.