Advertising Liability Injury Is Not Limited to Ad Agencies

 

This blog focuses on emerging risks with advertising liability:  what it is, why are we seeing claims, and what you can do about it.  We want to provide a high-level overview that introduces you to the coverage and provide tools on how you can prevent claims against you. It is not a deep dive into the intricacies of the policy, its coverage, and exclusions.

Organizations need to advertise to get the word out about their products and services. Most standard general liability policies provide coverage for personal and advertising injury. So, if you have a general liability policy, you can give a sigh of relief. But don't stop reading here. Before you completely exhale, we need to let you know about the coverage and emerging risks that are giving rise to more claims activity. 

 

What is Personal and Advertising Injury?

Most people are aware that general liability provides coverage for bodily injury and property damage.  It's easy to understand why you may be liable if you accidentally injure someone or ruin their property.   

But what of allegations that you violated someone's protected rights?  That's where personal and advertising Injury comes in. There are seven listed actions that fall within this coverage.

Personal injury includes:

• False arrest, detention, or imprisonment
• Malicious prosecution
• Wrongful eviction from, wrongful entry into or invasion of the right of private occupancy of a room, dwelling, or premises that a person occupies, committed by or on behalf of its owner, landlord, or lessor;

Advertising injury includes:

• Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products, or services;
  •  Example: Defamation through slander or libel that spreads false information
• Oral or written publication, in any manner, of material that violates a person's right to privacy;
  • Example: You disclose private facts, regardless of the truth
• The use of another's advertising idea in your "advertisement"
  • Example: Using another firm's ad content for your own 
• Infringing upon another's copyright, trade dress, or slogan in your "advertisement"
  • Example: Using copyrighted work without permission

 

Personal and bodily injury insurance may sound essentially identical, but the biggest difference is that bodily injury is confined to just that: physical harm. Personal injury can refer to intentional acts or social wrongs such as defamation. Advertising injury falls under personal injury insurance.

For the purpose of this blog post, we're going to focus on advertising injury, because that is where we're seeing claims. 

 

What we're noticing:

With the internet, you don't need a sign on your building or ad in the newspaper to promote your business. Having a website is a necessity and has the potential to get your brand in front of more eyes than traditional tactics will. Social media is a highly visual platform where the right images are crucial to capturing attention. Sites like Facebook, Instagram, and Twitter allow you to interact with consumers and prospects.  These tools are great at capturing attention and engaging with your audience. 

Unfortunately, given the examples above, it's easy to see how you can innocently commit an advertising injury against another business. While you want your business to be easily found, it's now easier than ever for someone to discover you have created an advertising injury against them. 

 

Who needs it:

All organizations have some type of advertising liability exposure, but if you have a website, social media, or online presence, you definitely do. The good news is that if you have a general liability policy, you most likely have personal & advertising injury coverage. 

 

Some professions, like media and advertising companies, web designers, attorneys, and publishers, have unique exposures where advertising liability is excluded and therefore needs a separate professional liability policy. 

 

What should you do:

• Add Excess Liability to your Insurance Portfolio

  • Whether you're found to be liable or not, the duty to defend yourself will be expensive and you may quickly exhaust the limits of your general liability policy.  Consider adding an excess liability policy to your insurance portfolio.  It will give you limits above and beyond your general liability limits. 

  • If your policy pays out claims for advertising injury, you're diluting your limits for other types of claims that could occur throughout the year.
  • An added benefit of an excess liability policy is you can typically have it extend coverage to your commercial auto and workers' compensation policies as well.  It's one of the best risk transfer mechanisms you can have for your business. 
     
• Use professionals and make sure they have coverage
  • Does your organization have a web and social media presence? Do you rely on professionals to manage all aspects of your online footprint?  Make sure they have professional liability that extends to protect your organization for their negligent acts.
     
• Make sure you're allowed to share images
  • Where do the images you use digitally come from?  Are you copying and pasting from a Google image search? 
  • Many images are copyrighted and if you use them on your business' website or social media platform, without paying or permission, you have an advertising liability exposure.
     
• Get permission
  • Get permission from individuals if you're using their image in your social media or marketing efforts (this helps prevent an invasion of privacy claims).
     
• Make sure your logo is not already trademarked
  • Search your industry and region for specific logos
  • Conduct a Google reverse image search
  • Search the US Patent Office
  • Search for keywords on portfolio sites/design platforms
    • §​ Pinterest, Instagram, Behance, Logopond, and Dribbble are a few sites you can check
  • Consult a trademark attorney to see if the logo is already taken

 

Conclusion

We hope that you now understand why personal and advertising injury insurance isn't just for advertising agencies. The internet makes a lot of things easier for us as individuals and companies alike, but one of those things is committing an advertising injury. If you have any questions or concerns, please don't hesitate to contact your agent. 

 

 

Disclaimers:

There are typically at least 14 exclusions that apply specifically to the seven listed offenses and are not listed in this article.

 

Legal Disclaimer. Views expressed here do not constitute legal advice. The information contained herein is for general guidance of matter only and not for the purpose of providing legal advice. Discussion of insurance policy language is descriptive only. Every policy has a different policy language. Coverage afforded under any insurance policy issued is subject to individual policy terms and conditions. Please refer to your policy for the actual language.