Professional Indemnity insurance protects a marketing agency from being sued for mistakes or errors that occur while providing services to their clients. It covers the costs of legal defence and any financial losses that may result from a lawsuit. In simple terms, it acts as a safety net for the agency in case something goes wrong during the marketing process, and a client holds the agency responsible for any damages.
And that’s all well and good, but what happens if the agency is met with disaster when marketing itself? Find out below.
Own marketing extension
Most Professional Indemnity policies only protect an agency when delivering services to a client. So if something goes awry when marketing itself, any claims would be outside the scope of the policy.
Luckily, insurers have recognised this is a common potential gap in cover. As a result, comprehensive Professional Indemnity policies designed specifically for agencies often provide extensions to protect the agency’s own marketing and advertising.
You’ll find the extension is automatically included without a separate charge. And the limit is usually the same as the main Professional Indemnity cover limit, with rare instances where this might be sub-limited at a lower amount.
Putting in place insurance for your own marketing and advertising can provide financial protection in case something goes wrong. Policies can protect against potential legal issues, like copyright infringement in a marketing campaign. For example, someone might accuse your new branding as being an infringement of their copyright. Even using an image you didn’t have permission to use can result in claims.
Comprehensive policies should also defend actions under defamation, like making statements within a blog or comments on social media that were reputationally damaging to a third party.
Insurance for your own advertising and marketing has the same benefits as other types of coverage, helping to mitigate risk and providing peace of mind.
What might the policy exclude?
As with all insurance policies, the devil is in the details. So, you need to check the fine print carefully. Here are some key exclusions or restrictions to be aware of:
Ignoring legal advice
A standard exclusion in most policies, insurers may not cover you if you ignore legal advice. After all, it would be considered reckless to publish content after the lawyers said it would be a bad idea.
Acting recklessly is also not acceptable. Essentially, if acting in an intentionally risky way with your own marketing and advertising, your insurance policy will not cover you.
Insurance also may not cover false, misleading, or deceptive statements in advertising, such as:
False advertising is illegal under consumer protection laws. Businesses can face legal action, fines, or penalties. And therefore, protecting companies from such situations would be considered against public policy.
Actions arising from publishing obscene, pornographic, or blasphemous content is invariably excluded. Again, this is because to insure against it would be at odds with current public policy.
Any advertising and campaigns that rely on competitions are rarely covered – in particular, excluding any failures in their outcome, like non-delivery of prizes or actions relating to unfair results. This means any agencies looking to run competitions, lotteries, and promotions for themselves or their clients need to be extra careful.
Some policies will specifically exclude actions where the agency is accused of passing off content as their own, or for their unauthorised use of another company’s trademark, name, or logo.
Insuring your agency
Protecting yourself is vital – and knowing which level of cover you need is even more important. Speak to our friendly team to find out more about own marketing extensions for your agency – contact us on 0161 533 0411. Alternatively, you can email us at firstname.lastname@example.org or fill in our online contact form and we’ll get straight back to you.
Photo by Campaign Creators on Unsplash
Agencies - May 16, 2023
Blog - May 9, 2023
Agencies - May 2, 2023