Scenario Library / Hallucination liability
Hallucination liability

Legal research or analysis tool returns confident wrong answers to clients

A Stanford study found that leading commercial legal-research AI tools hallucinated between 17% and 33% of the time. A law firm that relied on such a tool without checking could give a client wrong advice and face a malpractice claim. (The study is confirmed; the client-loss case is hypothetical.)

Not dated Hypothetical; built from a precedent

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This is an educational research summary built from public information. Allegations in pending cases are unproven, and the insurance notes above are for discussion, not coverage advice. Whether any policy responds depends on its specific wording, exclusions, endorsements, the facts, and applicable law.

Reviewed by Andrei Craciunescu, CA Licensed Insurance Broker #4467994