Artificial intelligence is rapidly becoming a core part of business operations, helping organizations automate customer service, analyze data, strengthen cybersecurity, streamline financial processes, and improve decision-making. But as AI adoption accelerates, so do the risks. According to recent DigiCert research, three-quarters of businesses surveyed deployed four or more AI tools in the past six months, yet nearly 80% also reported AI-related security vulnerabilities.
Despite AI’s growing role in the workplace, many organizations remain focused on its benefits without fully understanding the operational, financial, and reputational risks it can pose.
Dustin Carlson, president of SRA 831(b) Admin, which helps businesses prepare for difficult-to-insure and emerging risks through 831(b) Plans, said many companies are adopting AI faster than they’re evaluating its potential impact.
“AI is creating tremendous opportunities, but it’s also introducing risks that many organizations haven’t fully accounted for,” Carlson said. “The priority shouldn’t just be getting AI into the business. It should be understood where it’s being used, what could go wrong, and whether you’re prepared if it does.”
AI Is Already Embedded Across Businesses
One of the biggest misconceptions surrounding AI is that it exists only as a standalone initiative managed by IT teams.
In reality, AI has become embedded across nearly every department. Customer relationship management platforms, HR software, financial systems, cybersecurity solutions, marketing automation tools, and third-party vendors increasingly rely on AI to automate decision-making and generate content.
That widespread integration means AI failures can quickly become business problems, Carlson warned.
A chatbot that provides inaccurate information, an automated approval process that produces errors, or an AI-powered vendor experiencing a system failure can all have an adverse effect on customers, employees, or business partners.
“When customers interact with your business, they aren’t separating your organization from the technology behind the experience,” Carlson said. “If an AI system makes a mistake, your company’s reputation is still on the line.”
Carlson recommends organizations conduct AI inventories to identify where AI is being used throughout the business, determine which applications influence customer-facing decisions, and establish human oversight for high-impact processes.
Insurance Markets Are Responding to AI Exposure
The insurance industry has historically been among the first sectors to recognize emerging risks, and AI is increasingly becoming an area of concern.
As organizations adopt generative AI and automation tools, insurers are reevaluating how they underwrite AI-related exposures. Some carriers have introduced more restrictive policy language, increased underwriting scrutiny, or added exclusions related to AI-generated errors and cyber incidents.
The trend resembles the evolution of cyber insurance over the past decade, when rising ransomware attacks prompted insurers to tighten coverage requirements.
Carlson said business leaders shouldn’t assume their existing commercial insurance automatically covers every AI-related scenario.
“Coverage gaps often aren’t discovered until after an organization experiences a loss,” he said. “Reviewing policies before an incident occurs allows leadership to understand where additional protection or risk mitigation strategies may be needed.”
Many organizations are incorporating AI into broader enterprise risk management reviews to evaluate potential legal, operational, cybersecurity, and financial exposures.
Some qualifying businesses are also exploring supplemental strategies, including 831(b) Plans, which allow companies to set aside tax-deferred funds to help finance risks that may be difficult to insure or excluded from traditional commercial policies. As AI introduces new categories of business risk, these plans are becoming part of broader conversations around long-term resilience and business continuity planning.
Trust and Clear AI Policies Are Becoming Business Essentials
Regulators, investors, customers, and employees are paying closer attention to how companies use AI. As a result, business leaders are realizing that adopting AI isn’t enough. They also need clear guidelines for how it’s used, who oversees it, and how potential issues will be handled.
Without those safeguards, organizations face greater risks from inaccurate information, intellectual property disputes, regulatory issues, and damage to their reputation.
“People want to know AI is being used responsibly,” Carlson said. “Companies that are transparent about where AI is used, keep people involved in important decisions, and have a plan for responding when something goes wrong are in a much stronger position to earn and maintain trust.”
Having clear AI policies and a risk management strategy also helps organizations respond faster when problems arise, limiting business disruption and protecting customer confidence.
Balancing Innovation With Risk Management
AI is expected to remain one of the most transformative business technologies of the coming decade, offering significant opportunities to improve productivity, reduce costs, and drive innovation.
At the same time, experts caution that AI introduces risks that traditional governance models weren’t designed to address.
For many organizations, the next phase of AI adoption will involve strengthening oversight, reviewing insurance coverage, evaluating emerging exposures, and implementing comprehensive risk management strategies alongside technological innovation.
“AI will continue reshaping how businesses operate,” Carlson said. “The organizations that succeed won’t necessarily be the ones adopting AI the fastest. They’ll be the ones that pair innovation with thoughtful governance and a proactive approach to managing risk.”
As AI capabilities continue to evolve, organizations that invest in policy, transparency, and comprehensive risk management will likely be better equipped to navigate both the opportunities and the uncertainties that accompany the next generation of artificial intelligence.
