Crosby wants malpractice insurance for its AI lawyers, not just its human ones

The announcement, made by founder and CEO Ryan Daniels on LinkedIn in late July 2026, represents a significant shift in how autonomous legal work might be regulated and insured. Currently, Crosby employs between 45 and 60 licensed attorneys who review every legal output the AI produces, primarily contracts like non-disclosure agreements and master services agreements.

The firm operates as two entities: a technology company and a licensed professional limited liability company (PLLC). This structure already carries malpractice coverage and delivers services through a hybrid of code and conventional legal practice. The model has attracted clients including AI startups such as Cursor and Runway, with contract volume climbing from $30 million to $1 billion in under a year.

Insurance challenge

Malpractice insurance traditionally covers licensed professionals whose negligent judgments result in harm. Insuring AI agents presents unique complications since they hold no license, aren't persons, and their judgment comes from training data rather than legal education.

Crosby cannot simply purchase existing policies. The firm is working with auditors, bar associations, state regulators and insurers to build new evaluation standards and policy terms from scratch.

Industry implications

If Crosby succeeds in getting insurers and regulators to agree on AI risk evaluation, it could create a template for other legal tech firms. The economics are compelling—Crosby's model depends on a relatively small number of attorneys overseeing growing work volumes. Insured AI outputs could reduce human review needs, allowing faster scaling than headcount growth.

The approach differs from earlier efforts by companies like Orbital and Corgi, which treated AI as tools under lawyer control rather than near-autonomous entities. Crosby has been building toward this insurance model for some time, with prior work on insurance predating the announcement.

Regulatory hurdles

Bar associations and state regulators haven't yet approved standards for insuring AI agents. The process involves multiple parties with conflicting priorities—insurers will want data on error rates and audit methods before committing to policy terms, while regulators will demand clarity on accountability when AI makes mistakes.

Key questions remain about whether clients fully understand that no human may have reviewed their work, and who bears responsibility when an insured AI agent gets something wrong. The terms of any eventual policy will reveal how much autonomy the industry is actually prepared to grant AI agents.

The next step to watch is which regulators and insurers publicly engage in these discussions and what evaluation standards emerge from the talks. The outcome could reshape the future of legal services and autonomous professional work.