This article is part of a larger series on General Liability Insurance.
Personal and advertising injury coverage, included in commercial general liability insurance, protects your business against claims typically involving an infringement on a third party’s personal or intellectual rights. It can cover libel, slander, and copyright infringement. Coverage provides defense up to your personal and advertising injury coverage limits, in the event of a claim.
What Personal and Advertising Injury Coverage Is
As part of your general liability insurance, your business is covered for legal fees and settlements or judgments in claims stemming from personal and advertising injury. These are allegations that you caused someone a financial loss by violating his personal or intellectual rights. Examples of personal and advertising injuries include defamation, copyright infringement, and wrongful eviction.
One of the big differences between personal and advertising injury, also called Coverage B, and the other general liability coverage parts are its ability to pay claims involving intentional acts. For instance, a shop owner may intend to use an image in her advertisements without knowing she is violating a copyright. This differs from general liability’s Coverage A regarding bodily injury and property damage, which must occur by accident.
Personal Injury Coverage
Personal injury coverage constitutes protection for insurable offenses that produce harm—other than bodily injury.
A personal injury claim might include:
- False arrest, detention, or imprisonment: Depriving someone of their personal rights to liberty
- Malicious prosecution: Taking legal action against someone without probable cause
- Wrongful eviction: Wrongly expelling someone from their premises
- Invasion of privacy: Wrongly violating someone’s privacy
A personal injury might also mean ruining someone’s reputation through libel or slander. These defamation claims can be made from oral comments, statements made to customers, or even social media posts. When a business or its employees make statements indicating another party is a “crook” or “irreputable,” they run the risk of a personal injury claim.
Personal Injury Coverage Example
Let’s say you own a mixed commercial and residential building. A bakery leases the storefront from you, but they’re late paying rent one month. You expel them from the premises by changing the locks, and you fail to give any notice.
Because the bakery is unable to do business while locked out, the owner sues you for their losses and wrongful eviction. The personal injury coverage included in your general liability policy can help cover the claim and your court costs.
Advertising Injury Coverage
Like personal injury, advertising injury is coverage provided by your general liability insurance. It protects against offenses related to your business’s advertising of its goods or services.
Advertising injury claims include:
- Libel or slander: Making disparaging oral or written statements, or disclosing private facts, whether or not they’re true
- Copyright infringement: Infringing on someone else’s copyrights, logos, or intellectual property
- Misappropriation of advertising ideas: Using another business’s advertising, slogans, or ideas as your own without permission
- Invasion of privacy: Sharing someone’s private or personal information
Additionally, the use of another business’s advertising idea or infringing upon another’s copyright in your advertisement.
Advertising Injury Example
In this example, you own a home cleaning service, and your competitor has a well-known, catchy jingle. To drum up more business, you send out a direct mail ad that includes exact words from your competitor’s ditty and make false claims about them. In a double-whammy, your competitor sues for copyright infringement and libel.
The advertising injury coverage provided by your general liability insurance can help cover the claims and your legal expenses, up to the limits of your policy.
What Personal and Advertising Injury Doesn’t Cover
Personal and advertising injury coverage excludes numerous acts, particularly intentional acts of violation or misappropriation. If you knowingly violate the rights of another person or business, your claim will often be denied. Publishing or sharing false information even though you know it’s false is another instance of intentional harm.
Here’s a list of common personal and advertising injury coverage exclusions:
- Knowing violation of another’s rights: Intentionally violating another’s rights; knowing your actions would inflict personal or advertising injury
- Material published with knowledge of falsity: Knowingly spreading or printing false information about a person or company
- Material published prior to policy period: Failing to obtain coverage prior to time of first publication
- Criminal acts: Committing a crime or otherwise breaking the law
- Breach of contract: Failing to honor the terms of a contract
- Quality or performance of goods: Using advertisements that mislead the consumer about the quality of the goods, products, or services you sell
- Wrong description of prices: Mistakenly printing or advertising incorrect prices for products or services
- Infringement of copyright, patent, or trade secret: Infringing upon the intellectual property rights of others only if they’re used in a business’s advertisement and specifically listed as copyright, trade dress, or slogan
- Unauthorized use of another’s name or product online: Using a product or another person’s name without permission on the internet, including email and websites, to mislead potential customers
Personal and advertising injury coverage can be wide-ranging. However, many policies provide narrow language about what is and isn’t covered. It can be difficult for a business to prove it’s met the requirements to be covered by your business insurance company. Your insurer has the right to investigate and settle any claim, even if you don’t agree with it.
Who Personal and Advertising Injury Is Right For
Nearly every business in any industry can benefit from personal and advertising injury protection. Many business owners already purchase commercial general liability insurance for financial protection against unexpected and costly third-party claims related to bodily injury or property damage. It comes with the added protection of personal and advertising injury coverage.
Businesses aren’t usually required to have general liability insurance, but if yours regularly advertises or makes claims to attract potential clients, a general liability policy with personal and advertising injury coverage is a smart investment. However, if your business’s main operations are in advertising and media, the personal and advertising coverage included in general liability may not apply to your services in certain cases. Instead, you need errors and omissions insurance.
Media Companies are Excluded from Personal and Advertising Injury Coverage
Businesses in media, advertising, marketing, public relations, graphic design, certain types of information technology (IT), and entertainment are often excluded from the advertising injury coverage in general liability. These companies present increased exposure to advertising injuries due to the nature of their services. Personal injuries, however, are likely to be covered.
Areas where injuries often excluded from coverage for media businesses include:
- Advertising, broadcasting, publishing, or telecasting
- Designing or determining the content or website for others
- An internet search engine, access, or content or service provider
Personal injuries claims typically covered for media companies include:
- False arrest, detention, or imprisonment
- Malicious prosecution
- Wrongful eviction, wrongful entry, or invasion of privacy
Media and internet companies can get coverage for advertising injuries by obtaining a separate policy. Media liability insurance, a specialized type of professional liability policy, typically includes coverage for numerous professional liability-related offenses, including copyright infringement and libel.
Businesses that may benefit from media liability insurance include:
- Advertising agencies
- Film producers
- Graphic designers
- Social media influencers
- Content marketing agencies
- Brand managers
- Public speakers
- Public relations firm
Talk to your insurance carrier to ensure you have adequate coverage for personal and advertising injury protection.
How Much Personal and Advertising Injury Coverage Costs
Most business owners can expect to pay $400 to $600 annually for general liability insurance that includes personal and advertising injury coverage. Depending on your industry or business size, your premium may increase. Different insurers have different pricing based on a variety of factors.
Factors that impact the cost of personal and advertising injury coverage include:
- Business size: If you’re a sole proprietor, you may have a limited budget or time to reach out to customers
- Industry: Media and advertising businesses may face higher costs because they need to acquire an additional policy for sufficient coverage
- Customer exposure: How you interact—and how often—with your customers may influence your coverage costs
- Claims history: If your business has experienced a previous advertising or personal injury claim, your premium may increase
Personal and advertising injury coverage costs also vary based on your coverage limits as well as the deductible you select. Personal and advertising injury is a separate limit on your general liability policy so that you may request a higher limit for it—typically with a minimal impact on cost.
4 Ways to Reduce Personal and Advertising Injury Claims
If your business advertises and communicates with the public—whether on social media, word of mouth, direct mail, or anything in between, you may be susceptible to personal and advertising injury claims. General liability insurance can help provide financial protection, but a sound plan for avoidance begins with prevention.
Here are four tips for reducing personal and advertising injury claims:
1. Always Ask for Permission
If you’re using something that belongs to someone else in your advertising, in any format, always ask for permission first. This isn’t a case of “it’s better to beg forgiveness than to ask permission.” Not asking permission is like begging for a lawsuit. This applies if you’re using a customer testimonial, photos of a customer or celebrity, or a competitor’s logo.
2. Don’t Speak Poorly About the Competition
Another adage: “If you can’t say something nice …,” then bite your tongue. No matter how you feel about a competitor, keep your opinions to yourself. If a competitor catches wind that you’ve faulted their work or made false statements, they could sue your business for libel or slander. Even if the claim is false, you’ll need to pay for your defense, which can be costly.
3. Check the Copyrights of Images and Slogans
It’s easy to find a plethora of images and inspirational quotes on the internet today. Before you use it in your advertising, check the copyrights to avoid infringement. Use copyright-free images or royalty-free music or obtain permission from the copyright owner to use their intellectual property. Once the material is in a tangible form, it’s considered copyrighted.
4. Double Check Everything You Advertise for Accuracy
Whether you’re printing an ad or sending a marketing email, ensure all the information included is correct. Avoid making false claims about your services or products and be sure all pricing information is accurate. Your customers will hold you to any promises or statements made.
Personal and Advertising Injury Frequently Asked Questions (FAQs)
Personal and advertising injuries occur more often than you might realize, and it’s important to get all your questions answered to find the right coverage. Here are a few of the most commonly asked questions:
Does personal and advertising injury coverage include social media claims?
Personal and advertising injury coverage can help protect your business if you post something false, use another person’s likeness or image without permission, or infringe on another’s copyright on social media. However, if your actions are deemed intentionally harmful or your core operations are in social media advertising, your insurer may deny your claim.
How can I save on personal and advertising injury coverage?
Personal and advertising injury coverage is included with commercial general liability insurance—a policy you may already have. To help reduce the cost of your premium, consider purchasing a business owner’s policy (BOP), which bundles general liability and commercial property insurance into one affordable package.
Am I covered if I own a media business?
Most media and advertising-related businesses are not covered by standard advertising injury coverage. They are only typically covered for personal injuries, including false arrest, malicious prosecution, and wrongful eviction. To cover claims of libel, slander, copyright infringement, and other advertising injuries, these types of businesses should consider obtaining media liability insurance.
Am I covered if I face a claim that took place prior to obtaining coverage?
You might be covered if you have a prior acts endorsement to your personal and advertising injury coverage. Most policies are occurrence-based, but claims-made general liability might be available, which means claims are only covered if both the incident and the claim happen when the policy is active. Prior acts coverage protects claims that occurred prior to a policy’s purchase.
Personal and advertising injury claims are claims pertaining to damages your business causes to another person as a result of libel, slander, defaming their products or services, violating their right to privacy, and infringing on a copyright. Personal and advertising injury coverage pays for legal fees and court costs related to these claims.