Media companies – those companies that routinely engage in the publishing or transmission of information every day, day in and day out – usually take out specialized media-industry-specific coverage to protect themselves from the unique risk profiles of that business. But what about other businesses? After all, no business is immune to being accused of media and intellectual property related bad acts or negligence. Any business that has a website or creates advertising and marketing materials of any kind is potentially at risk of being sued for any of these possible media or IP-related torts:
- Certain Copyright or ‘trade-dress’ infringements
- Invasion of privacy
- Use of published information that places others in a negative or unfavorable light
- Misappropriation of an individual’s name or image.
These are litigious times, and many companies and even non-profits have found themselves in legal hot water because of ill thought out Facebook postings and Twitter messages from employees. Companies often delegate social media and editing duties to comparatively junior staffers who may not even be aware of some of the legal ramifications of what get they broadcast, publish or post.
Even with careful due diligence on the part of management, you can still get into trouble if an employee writes or broadcasts something that causes a problem, or if your business publishes or broadcast something generated by a freelancer or independent contractor. If the contractor you hired to write your website stole some images or photography or other peoples’ copy, the plaintiff is probably going to come after you and your business.
For this reason, most businesses need some form of personal and advertising injury insurance.
Publishing and media companies buy special expanded coverage for this potential risk because they publish so much, all the time. But other businesses have to guard against their own exposure, as well… and costs can be significant. Even if the plaintiff’s case has no merit, just the cost of mounting a defense alone can be crippling to many publishers or media companies and can push smaller operators into bankruptcy. Defense costs can easily run to $10,000 and more. When it’s your business and professional reputation on the line, you’re going to want to be able to mount a vigorous defense of your good name.
Does General Business Liability Protect Me?
In many cases, your general business liability coverage will provide some protection for you. Specifically, you would receive that coverage under your general liability (CGL) policy if Personal and Advertising Injury is included. In the event your organization is accused of any of the above-listed media wrongful acts that happen to be named perils in the insurance policy, and you are targeted in a lawsuit, the insurance coverage kicks in – first to help you mount a defense, and then to help you pay judgments or settlements, up to the limits of the policy you select.
An important note: For the coverage to apply, you must have committed the alleged tort in the course of your business. For example: If you run a transmission repair shop and someone has a problem with some possibly plagiarized content on your ad, you would likely be covered. If you’re running a web publishing business and selling advertisements on an auto-repair themed website out of the back room, and someone has a problem with an article you published, your transmission shop CGL likely would not cover it: It’s a separate line of business that is not typical of transmission repair shops. In that case, you may want to consider a policy specific to media operations in addition to your transmission repair business.
Additionally, the coverage under CGLs includes a number of exemptions, including:
- Publishing information you know to be false
- Copyright infringements other than those specifically listed in the policy
- Patent and trade secret infringements
- Electronic bulletin boards/chat rooms
- Contractual liability/breaches of contract
- Failure of your goods or businesses to conform to advertisements
- Any materials published before your policy started.
If your business is involved in social media and other types of regular communications, it’s best to both consult with your agents as well as review your policy. If you are engaged in publishing or publicizing on a regular basis, it’s important that you discuss this with your insurance professional for a coverage analysis and risk management consultation. Properly protecting yourself transfers any covered risk to the insurance company and provide for defense coverages as well.