Scenario Library / Hallucination liability
Hallucination liability

Firm's own in-house AI tool produces fictitious cases

Lawyers at Morgan & Morgan filed a motion in Wadsworth v. Walmart citing cases that did not exist, produced by the firm's in-house AI platform. A federal judge in Wyoming revoked one attorney's pro hac vice admission and fined three lawyers $5,000 in total.

Legal Services 2025 Verified in a source

Insurance products that may respond

Lawyers professional liabilityTech E&O (vendor side)

Why it matters for insurance

Liability can flow upstream to the AI tool vendor; contract allocation matters.

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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