Do I need an AI policy if I only have 5 employees?

Yes. Size doesn't matter here. If your team is using AI, you need written rules about how they use it. Doesn't need to be 30 pages. A one-page document covering what's allowed, what's not, and what needs approval is enough to start. Without it, every person is making their own judgment calls about what's appropriate, and those judgments won't always agree.