Novel York Bill Targets AI Chatbot Liability for Professional Advice

New York lawmakers are advancing legislation that would hold companies liable for damages caused by AI chatbots that impersonate licensed professionals or provide advice that falls within the scope of regulated professions. The bill, Senate Bill S7263, aims to protect consumers from potentially harmful or inaccurate guidance offered by artificial intelligence systems.

Addressing a Legal Gap

Currently, there are no specific laws preventing AI chatbots from claiming to be, for example, lawyers or therapists and offering corresponding advice. Senator Kristen Gonzalez, the bill’s sponsor, expressed concern that this lack of regulation poses a significant risk to the public. The proposed legislation seeks to address this gap by extending existing professional liability standards to AI-powered chatbots.

Key Provisions of Senate Bill S7263

The bill outlines several key provisions:

• Prohibition of Impersonation: Chatbots are prohibited from providing “substantive” responses or advice that, if given by a human, would constitute the unauthorized practice of a licensed profession under New York State law. This includes fields like law, medicine, and mental healthcare.
• Civil Liability: Individuals harmed by inaccurate or misleading advice from a chatbot could pursue civil lawsuits seeking economic and non-economic damages.
• Disclosure Requirements: Services utilizing AI chatbots must “conspicuously” disclose that the information generated by the system may be inaccurate.
• Scope of “Proprietor” Definition: The bill clarifies that the term “proprietor” does not include third-party developers who merely license their chatbot technology to others.

Industry Response and Concerns

Major AI developers like OpenAI and Anthropic have been actively involved in discussions regarding the responsible development and deployment of AI technology. As conversational AI becomes more prevalent, lawmakers and regulators are increasingly focused on establishing appropriate governance frameworks. Several companies developing conversational AI systems have already faced litigation alleging harm caused by inaccurate or persuasive responses generated by their AI tools, including cases involving interactions with minors.

Legislative Progress

As of March 6, 2026, Senate Bill S7263 has advanced through the New York Senate’s Internet and Technology Committee with unanimous support. It is currently on the Senate floor calendar for consideration. The bill has received support from Senators Kristen Gonzalez, John Liu, Julia Salazar, and Michelle Hinchey. Trackbill.com provides a detailed legislative history, including committee votes and report dates.

Looking Ahead

The passage of Senate Bill S7263 could set a precedent for other states considering similar regulations. As AI technology continues to evolve, the debate over how to balance innovation with consumer protection is likely to intensify. This legislation represents a significant step towards establishing clear legal boundaries for the use of AI chatbots in sensitive areas like healthcare and legal advice.