What is an AI policy and do I need one?

What is an AI policy and do I need one?

AI tools like ChatGPT, Copilot, and Mid journey are rapidly becoming part of everyday working life. With great power comes great responsibility—and without a clear AI policy in place, your business could be exposed to serious risks around data protection, ethics, compliance, intellectual property and reputational damage. Questions like who owns the IP on images that are AI generated or adding a document to be reviewed by an AI tool may seem like a good idea at the time but could be causing confidential information to lose its confidential status. Implementing an AI policy can guide your employee and contractors on the expectations of the business around the use of AI tools.

In this article we’ll look at implementing an AI policy can guide your employee and contractors on the expectations of the business around the use of AI tools.

Is an AI policy being used in our office?

Industry is undergoing a paradigm shift in the way in which work is approached with new developments in AI capability becoming available daily. One implication of this speed of development is that the differentiation of what is real and what is AI generated becomes blurred. For example, how do you know if the information coming from your office is AI generated?

One approach is to use apps like app.gptzero.me to test if text has been AI generated or Hive Moderation Ai Detector to test images for their AI content. These tools give you greater oversight over how information your business is creating or receiving is AI generated.

Another way to look at this is to ask yourself whether you would be surprised to hear form a client that the document you had provided them was generated by AI? If yes, it’s unlikely that your employees have guidelines about the business expectations of using AI in the production of client work. Having an AI policy can guide your employees on the expectation of AI use within the business.

While some companies have taken the stance of a total ban on the use of AI generated content in the performance of business others permit its usage for certain tasks or by certain departments. The decision on this very much depends on the nature of the business and the types of products/services offered.

If you’re creating content to be shown online then you need to be aware of the possibility that Google will actively filter out AI content resulting in lower ranking of your work. This is because the same type of content is likely to be same as that which can be found on apps like ChatGPT generated and reused online and in blog posts for example.

What are companies doing about it?

Despite the rapid growth of AI in the workplace, few companies have publicly addressed how they are managing its risks or defining acceptable use. Right now, there’s a noticeable gap between AI adoption and AI governance. However, a few organisations are stepping up.

Microsoft, for example, has published extensive guidance on responsible AI use, both internally and externally. It has implemented principles such as transparency, accountability, and fairness across its product development. Microsoft’s internal AI policies guide employees on when and how AI tools like Copilot should be used—and what oversight is required. It’s part of their wider commitment to building trustworthy AI systems and protecting user privacy.

Duolingo has embraced an “AI-first” ethos across hiring, performance reviews and product features. Their AI integration roadmap balances efficiency gains with transparency—ensuring that AI augments human decision-making rather than replaces it.

Meta’s internal AI training guidelines classify user prompts by sensitivity and enforce response-safety tiers. By codifying how its chatbots should handle delicate topics, Meta demonstrates how granular governance can protect both brand and users.

These examples show that there’s no one-size-fits-all approach. What matters is that companies acknowledge the risks, define their position, and communicate it clearly—both to employees and, where relevant, to clients.

On a smaller scale, Taxi Studio, a creative design agency based in Bristol, has also shared how it’s navigating AI. Instead of banning AI outright, they’ve opted for a measured, transparent approach. The company encourages exploration of AI tools, but within clear boundaries to ensure originality, protect client trust, and safeguard intellectual property. They’ve made it part of their creative workflow—but not a replacement for human input.

These examples show that there’s no one-size-fits-all approach. What matters is that companies acknowledge the risks, define their position, and communicate it clearly—both to employees and, where relevant, to clients.

For most businesses, this is uncharted territory. But those who act early not only protect themselves—they also demonstrate leadership, earn trust, and create a competitive advantage in how they manage digital innovation responsibly. if you have an online only business this also sends signals to Google that you’re transparent about how you use data as we’ve previously discussed 5 Ways Privacy Policies Boost Your Google Rankings & Improve SEO

Who owns the IP?

If you’re sending out surface pattern designs, for example, your company would typically own the intellectual property before transferring usage rights to the client. But when those designs are generated using AI, the question becomes: who owns the IP? This area is still legally grey.

In the past, businesses often used stock image platforms like Shutterstock to find visuals, which could then be licensed appropriately. That process provided clarity—clients knew where the image came from and that proper rights had been secured. But now, with clients and designers increasingly turning to AI tools to generate content themselves, the lines around ownership are getting blurred. Just because an AI created the image doesn’t mean it’s free to use—or that your business automatically owns it.

Logos and brand marks add another layer of complexity. These are often trademarked or otherwise protected, so using them in AI-generated content without permission can result in IP infringement. We’ve already seen cases where this has gone wrong—such as when images were created using ChatGPT that included elements resembling Disney’s brand marks, raising serious legal questions about unauthorised use.

There are other examples of companies being sued because their AI generated content is incorrect. Air Canada were sued earlier this year for misinforming a passenger, via their chatbot, about their bereavement fairs. The information given by a chatbot to the customer was incorrect and did not align with the airlines policy but this has not been tested by the airline. The passenger won in the small claims court with the court ruling that the passenger should be able to rely on the information provided by the airlines chatbot.  

The chances are there are employees and contractors within your business using AI tools for the performance of their roles. This may be by using tools such as ChatGPT to summarise documents or programs like Adobe which now have auto generate inbuilt into Photoshop and Illustrator.

So, where to start in creating an AI policy?

1. Audit Current AI Usage Across the Business. Before setting rules, have an open conversation with staff to find out what tools they are already using and why. This first step will help you to understand the current exposure your company may have and daily usage.

Once you are aware of the status quo, decisions can be made about what type of AI usage you are happy with and the type of guidelines or rules you wish to place around such usage. You’ll want to consider points such as the type of information being used, the types of services offered by the business and the applicable laws such as intellectual property and data protection.

2. Define AI. Not all staff will know what qualifies as AI, so it’s a good idea for  your policy to clearly define the scope. For example, how does your policy apply to:

• Public AI tools such as ChatGPT embedded AI in software like Microsofts Copilot
• Custom AI developed internally or by vendors

Clarity here prevents confusion and ensures your policy applies to the right tech.

3. Set boundaries around acceptable use. Some companies have placed an outright ban on the use of any publicly available or third party AI tools. You should be clear about what’s permitted, what is not and any actions to be taken if AI tools may be used for certain tasks. For example, when creating an image with AI, some platforms require this to be clearly stated when the image is published. The following poinst may also be useful:

• Which tools are approved for use and any which are prohibited

• Where human oversight is required
• When staff need to seek manager or legal approval

Use real examples to make the policy more relatable and actionable.

4. Protect data and privacy. AI tools often rely on user-provided inputs which can include sensitive information.
Make sure your policy:

• Prohibits the input of personal or confidential data into public AI tools.
• Make sure it aligns with UK GDPR and other applicable regulations. For example, you may have client contracts that state that you cannot disclose certain data to third parties without the consent of the client.
• Requires data minimisation and anonymisation wherever possible.
• If you are handling confidential data, the confidential status can be lost if such data is made public and disclosing such data to an AI tool may constitute making public.

This step helps reduce compliance risks and protect customer trust.

5. Regulation. Don’t forget that certain aspects of the EU AI Act are already in force with more provisions coming into effect in 6-monthly periods. If your business is creating or deploying AI systems tin and/or to the EU, your business also needs to comply with this legislation.

6. Establish accountability and oversight. AI may be very helpful with certain tasks and certain types of data but shouldn’t make decisions alone. There are certain requirements of data protection law which require the consent of the individual, such as automated decision making. If you
are profiling using AI, individuals must be given the right to object to such use of their data. Your policy should:

• Make it clear that outputs must be reviewed before use
• Ensure humans are accountable for decisions and actions
• Require transparent documentation of AI use in sensitive areas (e.g. HR or finance)

This protects against errors, bias, and reputational harm.

7. Educate and train your teams. In view of the rapid continuing development of AI, this should be an ongoing dialog and exercise. A policy only works if people understand it so ensure that you educate your teams and build awareness of it. Give quick guides and know how such as:

• Short AI risk briefings or onboarding modules
• Quick-reference guides or “dos and don’ts”
• Real examples of misuse or best practice

Make sure staff know how to raise concerns, have a go to person they can report inappropriate use to.

8. Review and update your policy regularly. AI is moving super-fast and your policy needs to be flexible to keep up. Set a review schedule to ensure that it evolves with your business and your teams covering key items such as:

• What new tools are available/being adopted by the business
• Changes in regulation or guidance
• Feedback or incidents that highlight gaps

Stay agile and make updates part of your wider digital risk strategy.

AI use is here to stay – make sure it’s safe

Your staff are probably already using AI tools, with or without a policy in place. Creating a clear, practical AI policy not only protects your business, it also builds trust, boosts digital confidence and protects from legal and reputational damage.

Need support writing an AI policy that fits your business? Ask a lawyer free with a 15-minute consultation. Clear answers to help you get it right.

Frequently Asked Questions