Concept
Human in the loop
Human in the loop means a person reviews or approves AI output before it takes effect — the AI prepares, a human decides.
When it applies
Anywhere an error costs money, safety or trust: quotes, customer messages, reports, bookkeeping categories. For a small business starting out, that is almost everywhere.
When it does not
It is not a checkbox. A review nobody actually performs is worse than no automation, because errors now carry the company’s confidence. If you cannot staff the review, shrink the task.
A business example
Klarna announced AI handling a large share of service chats, then publicly re-expanded human service after quality concerns — the loop was thinner than the volume required.
One next action
For one task, write three lists: AI does · Human checks · Human only. That is a hand-off card.