AI is transforming how businesses operate, from streamlining operations to unlocking new ways of working. But it also introduces serious risks if not managed properly, with loose AI practices more likely to expose sensitive data, create compliance headaches, and even open the door to cyber attacks. That’s why the need for AI insurance has never been greater. And with AI risk rising, businesses need to make sure they’ve got the basics covered.
So what does good “AI hygiene” look like? What steps can businesses take to tick the right boxes for insurers and show they’re serious about managing risk? Here are six practices we love to see.
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Know what AI tools your people use
If you don’t know which AI tools your employees are using, you’re flying blind. Some businesses operate basically a free-for-all, while others lock everything down. The sweet spot is visibility, where you monitor AI use across the enterprise to see what’s approved and what’s not. This isn’t about slowing people down; it’s about giving them guardrails so they can innovate safely. Think of it like a seatbelt: it doesn’t stop you from driving at higher speed, it makes it safer to do so.
With the right monitoring practices, you get a view of what’s happening and can redirect risky behavior before it becomes an intellectual property (IP) leak or causes data loss.
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Stop sensitive information from leaving your business
One of the biggest risks with AI is what goes into the prompt. If employees upload confidential financials or source code into an unapproved tool, that data can be embedded and reused in as little as 24 hours. That’s how sensitive information ends up in someone else’s query.
The best fix is putting controls in place to block sensitive data from leaving your environment. By monitoring at the prompt level, you can stop leaks before they happen and the business can move faster without fear.
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Stick to trusted, enterprise-grade AI
Public-facing AI tools might look convenient, but they can be a security nightmare. We’re seeing more mature businesses invest in enterprise-approved versions that meet compliance and security standards. These tools are safer and designed to integrate with your specific workflows, protecting your IP.
If you’re still relying on free or consumer-grade tools, you may experience a lack of control down the line. Enterprise licenses give you confidence that what’s behind the product is legitimate, rather than an unknown model you can’t trust.
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Give people clear rules and training
When we look at AI maturity, it’s as much about people as it is technology. Employees need training, context and a cultural drive to use tools safely. At CFC, we even have “AI guardians” – specialists with extra training who explore new tools and bring them into the fold.
What underpins this is a strong governance program. It’s best having a dedicated AI governance and monitoring committee, a body that’s accountable for setting guardrails, tracking usage and responding to risks. And by helping employees to understand why rules exist, they’re more likely to stay safe while finding new ways to improve the business.
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Lock down public-facing AI features
Every chatbot or external-facing AI tool is a potential vulnerability. Rolling out tools without thinking about security can be like leaving your windows and doors unlocked at home. Hackers are constantly looking for ways in, and poorly secured AI features can make you an attractive target.
Before you launch anything, make sure it’s locked down. That means not using public-facing versions. The more channels you open without proper controls, the greater the risk of exploitation.
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Keep up with AI laws and regulations
AI regulation is evolving fast, from GDPR implications and the EU AI Act to the California Consumer Privacy Act in the US. Staying informed is a sure sign of good hygiene. Businesses that understand the rules and show they care about compliance look like the right kind of risk to partners and regulators. Think of it like health and safety standards. The more you demonstrate maturity around governance and security, the greater trust you can build.
Of course, staying on top of the fast-moving regulatory landscape is easier said than done. That’s why it helps to set up a robust system of monitoring and alerts, helping you to stay ahead.
Why good AI hygiene matters
These hygiene practices aren’t a substitute for AI insurance. But by putting them in place, businesses show they take risk seriously, which can make them a stronger candidate for coverage.
At CFC, we now offer affirmative AI cover so businesses can move forward confidently, without worrying whether they’re protected.
Get in touch to learn more about the affirmative AI coverage businesses need to stay ahead of AI risk.