Business Insurance can be overwhelming to navigate, and with so many potential risks - it can be challenging to understand which coverages you truly need. While coverages like property damage and business interruption are more commonly and well understood, others that may be just as important go under the radar.
Personal and Advertising Injury coverage, most commonly found in a General Liability policy or Business Owners Package (BOP), is coverage that protects your businesses from claims or injuries that arise out of advertising services. Essentially, an advertising injury claim will occur in response to financial loss from damage to reputation, or loss of profits due to poor advertising. These occurrences, whether committed by you or your employees, can cause serious financial loss. Luckily, this coverage can help protect your business.
What Exactly Does Personal and Advertising Injury Protect Against?
Personal and Advertising Injury, which falls under Coverage Section B on a CGL policy protects the policyholder against claims regarding:
- Copyright Infringement: Reproducing, distributing, performing, or publicly displaying copyrighted content without permission or with an intention to display as original content
- Malicious Prosecution: Damage to reputation from wrongful prosecution without sufficient evidence
- Libel: Publishing a harmful statement about an individual or business in writing or via broadcast that is known to be false and could cause damage to their reputation or livelihood
- Slander: False and harmful statements spoken verbally that could damage reputation or livelihood
- Invasion of Privacy: Wrongful disclosure of private information, insights, ideas, or content
- Disparagement of Goods: Misleading advertisements that do not accurately represent goods or services
There are many nuanced situations that can fall under any one of these categories. The important thing to keep in mind is that this coverage is intended to protect your business against claims of damage that arise out of advertising, matters of reputation, and defamation.
Personal and Advertising Injury Claim Example
We live in a world where people are constantly marketing their services to the public, providing reviews, and talking about other businesses and their services. Especially with the rise in digital and social media, most people are unknowingly participating in advertising behavior. So, in what scenario would an advertising claim actually occur, and what would that look like?
Let's say, for example, an employee of a retail store is thought to be stealing goods from the store. In response to these suspicions, security detains the employee and searches their belongings. After finding nothing and confirming the employee never stole, the employee then quits and files a lawsuit for malicious prosecution. This coverage would cover the cost of the lawsuit up to the policy limit.
Copyright is another common occurrence where advertising and personal injury coverage would come into play. In some cases, copyright infringement is intentional. This is where a business intentionally takes someone else's work or ideas and presents them as their own. In other scenarios, it can be entirely accidental. This is where your new business name is the same as someone else, or your marketing looks similar to the competitor down the street. Copyright infringement claims can result in penalties up to $30,000 per infringement, so adequate coverage is key.
Where Do I Find Personal and Advertising Injury Coverage?
Personal and Advertising injury coverage is most commonly found in a General Liability Package, under coverage section B. This coverage is not typically available as a standalone policy. However, in many cases, you can increase the limit on your CGL to meet your specific needs. This coverage, though automatically included, does not come without its own list of exclusions. Each policy will differ so be sure your check with your carrier and specific policy on your personal and advertising injury.
What are the Exclusions of Personal and Advertising Injury Coverage?
As with most coverages, Personal and Advertising injuries will not cover any claims that arise from intentional acts. This means the policy will not cover situations such as:
- Intentional violation of privacy
- Knowingly publishing false information
- Wrongful depiction of prices, including false revenue insights
- Criminal Acts
- Intentional Copyright Infringement
Additionally, the policy will not cover any claims that arise due to publications that occurred prior to the start of the policy period. Even if your CGL policy is backdated, the personal and advertising injury coverage section may be excluded.
It’s important to note that in some instances, this coverage is included entirely. Media companies or businesses directly related to advertising and public relations are almost always excluded from this coverage on the CGL. As the nature of their services increases the risk of claims occurring, they would need to access this type of coverage under their professional liability policy.
How to Avoid a Claim
In some cases, Personal Injury and Advertising Claims are unavoidable. You can take all the precautions suggested to you and still wind up in a lawsuit. This is where insurance comes into play, and why it's always crucial to ensure your coverage meets the needs and risks of your business. There are, however, some ways to increase your protection and ensure none of your potential risks are intentional. Some steps to take include:
- Always Fact Check: Make sure you double and triple check figures, statements, and anything that could be considered published as “factual”. This will ensure your representations are accurate.
- Obtain Publishing Rights: In a lot of cases, you can publish others’ information as long as you obtain proper permission. Make sure you have the right to publish any information that is coming from your advertising.
- Be Accurate in Representation: It can be tempting to dramatize your advertising to bring in more customers, but this is asking for a lawsuit. Be highly accurate in your advertising, and ensure that all of your pricing, services, and abilities are fairly depicted.
Protect Your Business with ECBM Insurance
Curious if you have Personal and Advertising Injury Coverage included in your insurance package? Wondering what your limits should be, and how to fill coverage gaps? ECBM has the resources and experience you need to understand your insurance needs and secure coverage at the best possible price. Whether you have an insurance program that needs review or are looking to secure new coverage, ECBM can help. Contact us today for more information.