Personal and advertising injury coverage protects your business against claims, typically involving an infringement on a third party’s rights or intellectual property. It can cover libel, slander, and copyright infringement. Coverage is included in a commercial general liability (CGL) policy and, in the event of a claim, provides defense up to your coverage limits.
How Personal and Advertising Injury Coverage Works
General liability insurance protects your business by providing coverage for legal fees, settlements, and judgments in claims stemming from negligence by your business. Usually, general liability focuses on bodily injury or property damage to a third party. However, Coverage B in the general liability policy extends coverage to accusations of personal or advertising injury.
A significant difference between this coverage and the rest of the general liability policy is that it will cover claims involving intentional acts. For example, a landlord wrongfully evicted a tenant. This intentional act, wrongful eviction, would be a covered loss under the policy.
There are ways for people to claim harm that are not physical, such as bodily injury, and personal injury coverage offers your business protection for those types of claims. Some examples are:
- A 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
- Libel or slander: Defaming someone or another business, in an oral comment to a customer or a social media post
For instance, you own a heating, ventilation, and air conditioning (HVAC) service company, and your employee is servicing a customer’s AC unit. The customer is a neighbor to an owner of a competitor. While your employee is servicing the unit, they make disparaging remarks about the quality and honesty of the other company, and the client tells the owner, who then files a lawsuit against your business. The cost of investigating the claim and defending your business falls under the personal injury coverage of your general liability policy.
What Personal and Advertising Injury Coverage Excludes
Like nearly every type of insurance policy, personal and advertising injury coverage excludes numerous acts and certain industries from coverage.
Common Exclusions
While this list isn’t exhaustive, it does give you an idea of what may not be covered under your policy.
- Knowingly violating 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
- Criminal acts: Committing a crime or otherwise breaking the law
- Breach of contract: Failing to honor the terms of a contract
- Wrong description of prices: Mistakenly printing or advertising incorrect prices for products or services
- 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
Industries Excluded
Businesses in media, advertising, marketing, public relations, graphic design, and entertainment are often excluded from personal and advertising injury coverage. Personal injuries not related to advertising, however, are still likely to be covered.
The reason is that these types of businesses present too much risk exposure to advertising injuries for the insurance company and will need a more specialized policy. Media liability insurance, a specialized type of professional liability insurance, typically includes coverage for advertising-related offenses. Businesses that may benefit from media liability insurance include:
- Publishers
- Broadcasters
- Advertising agencies
- Film producers
- Graphic designers
- Social media influencers
- Content marketing agencies
- Brand managers
- Public speakers
- Public relations firms
Tips To Reduce Personal and Advertising Injury Claims
While it’s helpful to have insurance, you’ll need a proactive plan to prevent claims from occurring and to minimize costs.
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. Not asking for 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.
Don’t Speak Poorly About the Competition
No matter how you feel about a competitor, keep your opinions to yourself. If a competitor learns that you had faulted their work or made false statements, they could sue your business for libel or slander.
Check the Copyrights of Images and Slogans
It’s easy to find images and inspirational quotes on the internet—and it’s even easier to use them without thinking about their sources. Before using them in your advertising, check the copyrights to avoid infringement. Only use royalty-free music and copyright-free images from reputable platforms or obtain permission from the copyright owner to use their intellectual property. Once the material is in a tangible form, it’s considered copyrighted.
Double-check Everything You Advertise for Accuracy
Before finalizing the copy, ensure all the information included is correct. Avoid making false claims about your services or products and pay attention to all pricing information. Don’t promise a good, service, or cost that you cannot deliver.
Frequently Asked Questions (FAQs)
Yes, this insurance can help protect your business if you post something false or use another person’s likeness or image without permission. However, if your actions are deemed intentionally harmful, or your core operations are in social media advertising, then your insurer may deny your claim.
Since personal and advertising injury insurance is included in general liability insurance, policies can range from $350 to over $1,000 annually for a CGL. Depending on your industry, or business size, your premium may increase.
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. Providers factor claim history and industry risk into premium calculation, so be proactive in creating a plan to minimize risk and put into place best practices for your employees to avoid losses.
Most media and advertising-related businesses are not covered by Coverage B in a standard CGL policy. Those businesses have a much higher chance of risk and need specialized media liability insurance.
Bottom Line
Personal and advertising injury insurance protects you from claims that your business caused harm to another person from libel, slander, defamation, privacy violations, and infringing on a copyright. This coverage pays for legal fees and court costs related to these claims.
The Hartford tops our list of the best general liability insurance companies. Its policies have personal and advertising injury included in general liability, and it also offers media liability insurance. You can get a free, no-obligation quote online in just minutes.
