Artificial intelligence (AI) tools are becoming commonplace in workplaces across the United States, helping organizations improve productivity and streamline workflows. Across marketing, advertising and communications, companies can use generative AI to produce sophisticated and realistic images, blog posts and other content at scale. However, AI-generated content can give rise to intellectual property (IP) and content liability concerns. For example, AI-generated outputs may inadvertently infringe third-party copyright, leaving organizations potentially exposed to costly legal claims. Additionally, in some circumstances, content generated using AI may not qualify for copyright protection, leaving organizations with no legal recourse against third-party use.
This article discusses how AI-generated content can expose organizations and outlines risk mitigation tips.
The Exposure: Copyright, Trademark and Content Liability Risks
AI-generated content can pose a range of risks, particularly since its rapid adoption has left governance frameworks struggling to keep pace. Consider the following key exposures:
- Infringement claims from AI-generated outputs—AI-generated outputs may inadvertently reproduce or closely resemble copyrighted material, as these systems are trained on large volumes of external data, including human-created text, images and code. While courts are still determining how copyright law applies, organizations remain responsible for the content they produce. They may face copyright infringement claims if they publish AI-generated outputs that resemble protected source material, even when using third-party tools.
- Loss of copyright ownership—AI-generated outputs may not qualify for copyright protection if they lack meaningful human authorship. Organizations can generally only claim copyright for aspects of work that reflect significant human input or creative control. As such, using AI-generated content for marketing materials that require exclusivity could leave organizations unable to protect flagship assets, increasing the risk of competitors reusing similar content and potentially weakening their position in the market.
- Defamation, false advertising and consumer deception—AI can “hallucinate” information, meaning outputs that sound plausible may be factually incorrect or entirely fabricated. Organizations using AI-generated copy could inadvertently make inaccurate statements about their own products or those of competitors, leaving them vulnerable to defamation or false advertising claims. Misleading marketing materials (e.g., false customer testimonials written by AI) may also breach consumer protection laws, further increasing liability exposure.
- Trademark misuse—AI-generated outputs may also include or replicate third-party trademarks, logos and other brand-identifying elements. Organizations may inadvertently include this content in marketing materials without authorization, potentially exposing them to trademark infringement claims, even if the use was accidental. Overall, organizations generally remain responsible for the content they publish or distribute, and attributing errors to the use of AI tools is not a reliable defense.
Further adding to the risk, some employees may use AI tools without seeking permission from their managers or the IT department—a phenomenon known as “shadow AI.” When content is produced without organizational oversight, it becomes more difficult to monitor and control, increasing the likelihood of liability exposure.
Risk Management Measures
To help mitigate IP and related AI content risks, organizations should consider the following risk management measures:
- Establish a clear internal policy for AI content. Organizations should create a clear internal policy governing how AI can be used for content creation, including the guardrails to consider before publication and which tools are permitted and for what purposes. The policy should be regularly reviewed, and employees must be trained in its use.
- Require meaningful human review and modification. Organizations should ensure employees add their own creative contributions to AI-generated content, refining and restructuring it so the final output is distinct from the original to strengthen copyright protection. Where appropriate, disclosing or labeling AI-generated content may be prudent to reduce the risk of consumer confusion or misrepresentation.
- Screen AI output before publishing. Organizations should ensure all AI-generated outputs are screened before publication, checking for unverifiable factual claims and identifying content that may resemble protected sources or third-party trademarks.
- Review vendor contracts. Organizations should seek clarity from vendors on the types and sources of data used to train third-party AI tools and assess how this may impact IP risk. They should also consider whether AI vendors offer indemnification for training-related infringement claims.
- Maintain records of AI-generated content creation and review. Organizations should carefully document how AI-generated content is modified, curated and incorporated into final work to demonstrate human authorship, support copyright registration efforts and improve defensibility in the event of infringement allegations.
Insurance Considerations
IP claims can be costly to defend, even when baseless. To reduce financial risk, organizations should review their insurance programs to ensure they are adequately covered. While some commercial general liability (CGL) insurance may provide limited coverage for certain copyright infringement claims under personal and advertising injury coverage, exclusions for AI-generated content are becoming more common. Similarly, professional liability or errors and omissions (or E&O) insurance may respond where AI-generated content forms part of professional services, though coverage will depend on policy terms. By contrast, cyber insurance is unlikely to respond to copyright or trademark disputes unless specifically endorsed, as it typically focuses on data breaches, privacy violations and network security incidents.
Organizations should scrutinize existing policy wording for exclusions or limitations on AI-generated content and consider media liability insurance, which can provide coverage for copyright infringement, defamation and false advertising claims falling outside the scope of standard CGL policies. Businesses should also review any indemnities offered by AI vendors to understand where contractual provisions end and insurance coverage should begin.
Conclusion
As organizations seek efficiencies through AI, they should assess their exposure to risks arising from AI-generated content and implement appropriate risk mitigation measures. They should also review their insurance programs to ensure they are adequately covered.
Contact us today for additional risk management guidance and insurance solutions.
This Risk Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2026 Zywave, Inc. All rights reserved.
