Advertising agencies engage in challenging and creative work and have a tremendous responsibility to their clients. Your clients expect you to create and implement campaigns that boost their image and increase sales. If your efforts fail or you make a mistake in your work, your client’s investment in your services may become a source of contention.
Your client may face financial damage if your efforts don’t live up to their promises. And if a client is unhappy for any reason, filing a lawsuit against you is never out of the question.
As you work for businesses, government agencies and other entities, your agency is subject to numerous business risks, from typical property and physical injury risks in your office, to serious financial risks if a client or someone else sues you.
Advertising agencies are often accused of making mistakes or failing to deliver effective campaigns. Sometimes a client is simply hard to please, but negligent oversights, errors and omissions happen too — despite your best intentions. Mistakes are inevitable in your fast-paced and deadline-driven environment.
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If a client trusts you to portray its public image and you make an error or fail to provide services as promised, a lawsuit is likely. You have to protect your business assets, reputation and client relationships if you face claims related to any of the following:
- Defamation of character
- Slander and libel
- Copyright infringement
- Causing emotional distress
- Negligent failure to deliver agreed-upon products or services
- Errors or omissions that lead to financial loss for a client
- Professional negligence
Consider these examples:
- A word is omitted from an advertisement, and the error leads to some type of financial loss for the client.
- A campaign fails to deliver results as promised (e.g., increased sales).
- An employee fails to obtain reproduction rights for a photo used in a client campaign, and the client is sued for copyright infringement.
- A competitor accuses your client of slander or libel because of an advertisement you created.
Advertising professional liability insurance is a type of errors and omissions insurance that protects your business if you are sued for some type of professional negligence. It protects you from potentially devastating costs associated with lawsuits even if the claim is without merit.
A professional liability policy will pay for your legal defense, including attorney fees, court costs and any settlements or judgments that you must pay. It may even cover bodily injury and property damage that results from your work.
Business Insurance for Advertising Agencies
Advertising agencies are subject to numerous other property and liability risks that need to be addressed with advertising agency insurance. Unforeseen events can threaten your livelihood at any time if you do not have the right insurance coverage to protect against events such as these:
- Slips and falls
- Weather events (wind, hail, etc.)
- Fire and smoke
- Theft and vandalism
- Employee injuries
- Damage to a client’s property
Working closely with an Independent Insurance Agent, you can determine exactly what risks you have and find tailored advertising agency insurance to address them.
If you are a small- to medium-sized agency, you may be able to bundle your basic property and liability coverage together into a packaged policy designed for small businesses owners. A business owners policy (BOP) provides comprehensive, affordable coverage, including:
- Property coverage for buildings and their contents, such as computers, office equipment and furniture whether it is owned or leased.
- Business interruption coverage, which compensates for lost business income and pays for operating expenses if you must temporarily close following a covered loss (e.g., a building fire).
- Liability coverage, which pays for claims of bodily injury and property damage to third parties due to your negligence (e.g., a client injury at your office or damage to a client’s property while visiting their office).
You might also want to consider endorsements to your business owners policy or standalone policies that provide the following types of coverage:
- Computers and media coverage — also called electronic data processing (EDP) insurance — pays for lost data and related lost income if your computers or network are damaged by theft, vandalism, viruses or malware. It may pay for loss of data or software and pay for physical damage to computers or hardware.
- Cyber liability insurance provides coverage in the event of a data breach involving your business. It helps pay for the cost of notifying affected clients as well as the cost of public relations and investigations.
- Business auto insurance covers any vehicles your company owns. It provides liability coverage if you or an employee injures someone or causes property damage while driving a company vehicle. If your employees drive personal vehicles for business purposes, you must have nonowned or hired auto liability coverage to protect your company from accident-related costs.
- Commercial umbrella insurance provides excess liability protection to any of several other liability policies you might have, including commercial general liability, employer’s liability and hired and nonowned auto liability. By purchasing one commercial umbrella policy, you essentially get higher limits on all of those policies rather than having to raise the limits on each policy individually.
- Workers’ compensation insurance is typically required for any business that has employees. It pays for lost income and medical expenses for employees that are injured on the job.
Where to Find Tailored Advertising Agency Insurance
While most advertising agencies perform many of the same services, every business is unique. You need tailored advertising agency insurance that addresses the specific risks you face and that will help you protect your business from financial harm.
An independent agent can work with multiple insurance companies, including those that specialize in insurance for ad agencies. Your agent can work closely with you to find the right mix of coverage for your needs and budget and can be your trusted adviser for the long term.
Contact a local independent agent today.