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Aipedia: Marketing and PR agencies
AI-written ad copy must meet the same evidence standard as any other copy, and an unsupported claim is the advertiser's and often the agency's problem. Agencies are exposed because generative tools write confident claims that nobody has checked.
Part of: AI in Marketing and PR agencies
In short
Generative AI tools write persuasive copy quickly but can invent statistics and performance claims. The ASA applies the CAP Code to AI-written ads, expecting evidence for objective claims, and section 226 of the DMCC Act 2024 bans misleading actions from 6 April 2025. IPA/ISBA principle 10 expects human fact checking. When an ad is banned, the client may seek its wasted costs from the agency, and a competitor may also sue. PI may respond to negligence claims, subject to the wording; media cover may be needed for competitor claims.
Copywriters may use a generative AI chatbot to draft headlines, product descriptions, landing pages, scripts and email copy, then edit the output. The tools are good at persuasive language and at sounding certain. That is the problem: a model will happily write "clinically proven", "the UK's fastest" or "cuts bills by a third" without any evidence, and the phrase can survive editing because it reads well. Claims about a client's own AI features need care too, and the ASA has said CAP is considering how consumers interpret claims about AI capabilities.
The ASA applies the CAP Code to AI-written ads in the same way as any other copy. The Code expects marketers to hold evidence for objective claims before the ad runs, and an ad that materially misleads breaches it whoever drafted the words.
Consumer law adds a second layer. Section 226 of the DMCC Act 2024, in force since 6 April 2025, prohibits misleading actions: false or misleading information, or an overall presentation likely to deceive the average consumer even where each statement is true. The CMA's CMA207 guidance explains the test. IPA/ISBA principle 10 expects human oversight including fact checking, so an unchecked AI claim falls short of the industry standard as well as the law.
Illustrative scenario: an agency uses AI to produce landing page copy for a home energy client. The draft says the product "cuts energy bills by up to 40%". Nobody asks the client for data. The ASA upholds a complaint and the ad must be withdrawn. A competitor then writes to the client alleging the comparison disparages its product. The client says it relied on the agency's expertise, refuses to pay the final invoice and asks the agency to cover the reprint and media costs.
Similar issues arise with invented statistics, misquoted awards, "free" offers with undisclosed conditions and environmental claims that sound plausible but cannot be backed up. When AI drafts at volume, one unsupported phrase can be repeated across dozens of assets.
The ASA's sanctions fall on the advertiser, usually the client, and are mainly about removing the ad. The money question arises when the client seeks its wasted costs from the agency, or a competitor brings a legal claim. PI for agencies may respond to a client's claim that the agency negligently drafted or failed to check copy, subject to the wording, the excess and any exclusion for fees disputes or contractual liabilities. A competitor's claim may need media or IP cover. Regulatory fines imposed on the client are generally uninsurable and are not usually something the agency's PI will pay. See agency PI or media liability for AI claims and PI claims examples for PR and communications firms.
The same discipline applies when AI copy is produced at volume for blogs and landing pages, where errors multiply quickly; see AI SEO content at scale. If a claim has already gone wrong, speak to your broker before admitting fault or agreeing to cover the client's costs, because doing so without insurer consent can prejudice cover. More on agency cover generally is in professional indemnity for marketing agencies, and the Aipedia hub for marketing and PR agencies covers the wider rules.
How Apex helps: Apex arranges PI for marketing and copywriting agencies. A broker checks how your policy treats claims from AI-drafted copy and whether media cover is needed for competitor claims.
Usually, yes, in practice. Regulators look at the ad, not the tool. The client is the advertiser, but if the agency drafted and recommended the copy without checking it, the client may seek its losses from the agency.
Not automatically. An ASA ruling is not a claim for damages against the agency. PI usually responds when a client or third party makes a claim alleging negligence, so withdrawal costs may only be covered if the client claims them from you, subject to the wording.
Section 226 is aimed at traders engaging in commercial practices, which covers the client and can cover anyone acting on its behalf. Agencies should assume misleading copy they produce can create legal exposure for the client and, through contract, for themselves.
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.
