Small Business AI Safety Checklist
20-point checklist for Canadian small businesses using AI tools
73%
of small businesses make costly AI mistakes that could be prevented
What are AI tools?
AI tools like ChatGPT, Claude, Gemini, Jasper, and Grammarly help businesses write content, answer questions, analyze data, and automate tasks. While powerful, they come with legal and security risks if not used properly.
0 of 20 completed ยท 0% AI-ready
Data Protection & Privacy
Verify AI servers in Canada
AI tools like ChatGPT, Claude, or Gemini store your business data on computer servers. If these servers are in the US, you’re breaking PIPEDA (Canada’s privacy law) and could face $100K+ fines.
How to check: Look in your AI tool’s settings for “data residency” or contact their support to ask where your data is stored.
High Risk
Review AI tool privacy policies
Popular AI tools often use your business conversations to train their AI models or share data with partners. This might violate Canadian privacy laws and expose sensitive business information.
Red flags: Policies that say “we use your data to improve our services” or don’t mention Canadian compliance.
High Risk
Get customer consent for AI processing
If you put customer information (names, emails, purchase history) into AI tools for analysis or customer service, you need written permission from customers first.
Example: “We may use AI tools to analyze your purchase history to provide better recommendations. Do you consent?”
Medium Risk
Create data retention policies
Decide how long you’ll keep AI-generated content (like AI-written emails, reports, or analysis) and customer data used in AI tools. Having a clear policy protects you legally.
Example rule: “Delete AI chat logs after 90 days, keep AI-generated marketing content for 2 years.”
Medium Risk
Monitor employee AI usage
Track which AI tools your employees are using and what type of business information they’re sharing. Employees might unknowingly share confidential information with AI tools.
Check monthly: Are employees using ChatGPT for customer emails? Uploading financial documents to AI tools?
Low Risk
Legal & Compliance
Define AI liability in contracts
When AI tools make mistakes (wrong information, biased decisions, copyright violations), who pays for the damage? Your business or the AI company? Most AI companies limit their liability to almost nothing.
Example problem: AI writes a marketing email with false claims. Your business gets sued, not OpenAI.
High Risk
Update business insurance
Standard business insurance often doesn’t cover AI-related problems like data breaches from AI tools, copyright infringement from AI-generated content, or discrimination from AI decisions.
Ask your insurer: “Does my policy cover losses from AI tool data breaches or AI-generated content issues?”
High Risk
Create employee AI guidelines
Give employees clear written rules about AI use: which tools are approved, what information can/cannot be shared, and how to use AI safely for business tasks.
Example rules: “Never upload customer lists to AI tools. Don’t use AI for legal or medical advice. Always fact-check AI outputs.”
Medium Risk
Document AI decision processes
If you use AI to help make business decisions (hiring, pricing, customer service), keep records of how those decisions were made. Regulators may ask for this information.
Document: “Used AI to screen 50 job applications, final decisions made by hiring manager Sarah.”
Medium Risk
Security & Operations
Enable two-factor authentication
Add an extra security layer to all AI tool accounts. Two-factor authentication (2FA) requires both your password AND a code from your phone, preventing 99% of account breaches.
How to enable: Go to account settings in your AI tools and turn on 2FA or “two-step verification.”
Medium Risk
Backup AI-generated content
AI tools sometimes go down or lose data. If you’ve created important content (marketing materials, reports, procedures) using AI, save copies on your own systems.
Best practice: Copy important AI outputs to Google Drive, Dropbox, or your company file server weekly.
Low Risk
Test AI outputs for accuracy
AI tools sometimes “hallucinate” (make up facts), show bias, or produce low-quality work. Check AI outputs weekly for accuracy, especially for customer-facing content.
Weekly check: Review AI-generated emails, social posts, or reports for factual errors or inappropriate content.
Medium Risk
Monitor AI costs monthly
AI tool costs can quickly escalate, especially with pay-per-use models like ChatGPT API or Claude. Track spending monthly to avoid surprise bills and optimize which tools provide the best value.
Track: How much you spend on each AI tool, which employees use the most, and calculate return on investment.
Low Risk
Control AI access by role
Not every employee needs access to every AI tool. Junior staff might only need basic tools, while managers get access to advanced features. This reduces security risk and controls costs.
Example setup: Interns get Grammarly, managers get ChatGPT Plus, executives get enterprise AI tools.
Medium Risk
Training & Knowledge
Train employees on prompting
Better prompts (instructions to AI) = better results. Training your team on how to write effective AI prompts can dramatically improve productivity and output quality.
Good prompt: “Write a professional email declining a meeting, explaining I’m traveling, and suggesting 3 alternative dates.”
Low Risk
Plan for AI emergencies
What happens if your main AI tool goes down, makes a serious error in customer communications, or accidentally exposes sensitive information? Have a response plan ready.
Emergency plan: Backup communication methods, who to contact, how to handle data breaches, alternative AI tools.
Medium Risk
Stay updated on AI regulations
Canada is rapidly developing new AI laws. Bill C-27 (Artificial Intelligence and Data Act) and provincial regulations could significantly impact how small businesses can use AI tools.
Stay informed: Subscribe to Canadian government updates or work with a lawyer familiar with AI regulations.
High Risk
Measure AI return on investment
Track how much time and money AI tools save versus their cost. This helps you make smarter decisions about which AI tools to keep, upgrade, or cancel.
Track: Hours saved on writing, customer service improvements, revenue from AI-enhanced marketing.
Low Risk
Strategic Planning
Create 6-month AI roadmap
Don’t adopt AI tools randomly. Plan which tools to introduce when, how to train staff, and what business processes to improve. Strategic planning prevents expensive mistakes and wasted time.
Roadmap example: Month 1: Email writing AI, Month 3: Customer service chatbot, Month 6: Inventory management AI.
Medium Risk
Identify AI-ready processes
Start with business tasks that are repetitive, time-consuming, but not highly sensitive. Good candidates: email writing, social media posts, basic data analysis. Avoid: legal advice, medical decisions, complex financial analysis.
Good first uses: Writing job postings, creating product descriptions, scheduling social media posts.
Low Risk
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