How to Write an AI Policy for Your Small Business

Your employees are already using AI tools. Whether you've sanctioned it or not, ChatGPT, Copilot, Gemini, and dozens of other tools are being used to write emails, summarize reports, draft proposals, and answer questions about your business. Without a policy, you have no visibility into what data is being shared, what tools are being used, or what liability you're accumulating.

The good news: you don't need a 40-page policy or a legal team to get started. A practical, one-page AI policy that your team actually reads and understands is worth far more than a comprehensive document that sits in a shared drive untouched.

Why Every Business Needs One Now

The risks of unmanaged AI use aren't hypothetical. They include:

• Data exposure. Employees pasting customer data, financial information, or proprietary business details into public AI tools. Many consumer AI services use submitted data to improve their models — your confidential information may not stay confidential.
• Accuracy liability. AI-generated content presented as fact. Hallucinated statistics in a client proposal. A legal summary that's wrong in a consequential way.
• Copyright and IP risk. AI-generated images, code, or content that may carry unclear ownership or infringe on third-party rights.
• Inconsistent quality. AI output that hasn't been reviewed producing customer-facing content that doesn't reflect your brand or standards.

The Five Questions Your Policy Should Answer

1. Which tools are approved? Maintain a short list of sanctioned AI tools — ideally ones with enterprise data agreements in place. Everything else should require explicit approval before use for business purposes.
2. What data can be shared? Define clearly what types of information must never be entered into external AI systems: customer PII, financial records, employee data, trade secrets, attorney-client communications. When in doubt, the default should be: don't paste it.
3. Who reviews AI-generated output? Establish that AI output is a draft, not a deliverable. Any AI-generated content going to customers, partners, or the public must be reviewed and approved by a human who is accountable for its accuracy.
4. How do we disclose AI use? Some contexts require or benefit from disclosing that AI was used. Define where disclosure is required (e.g., AI-generated marketing content) and where it's optional.
5. Who do I ask if I'm unsure? Policies fail when employees don't know how to navigate the gray areas. Name a person (or role) responsible for AI governance questions.

What a Simple Policy Looks Like

Your AI policy doesn't need to be long. A well-structured one-pager covering approved tools, data handling rules, review requirements, and a contact for questions is sufficient for most small businesses. The most important quality of a policy isn't its length — it's whether your team has actually read it and knows what to do.

Review and update it at least twice a year. The AI landscape is moving fast, and a policy from twelve months ago may no longer reflect the tools your team is using or the risks you're facing.

Getting Started

The best approach is to start with a conversation, not a document. Gather your leadership team and walk through the five questions above. You'll likely surface existing behaviors that need addressing — and you'll get buy-in from the people who need to follow the policy. Document what you agree on, share it with your team, and commit to revisiting it regularly.

If you'd like help structuring an AI governance framework appropriate for your business size and industry, that's exactly the kind of work we do.