Personal and advertising injury 101

We break down advertising injury insurance - what it covers and why you may need it to protect your business. Learn more.

May 7, 2020

What’s an advertising injury?
What kinds of advertising can get you sued?
Exclusions and exceptions
What counts as advertisement?
Protect yourself

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As a smart, careful small business owner, you know that you need insurance coverage for various kinds of risk you’re exposed to on a daily basis. If you’ve read our guide on what general liability insurance covers, you know that a main area of concern is personal and advertising injury.

Personal injury sounds pretty straightforward like it could refer to bodily harm and medical treatment. But in terms of general liability, personal injury has to do with non-medical harm, such as wrongful prosecution, eviction, or violations of rights.

But what about advertising injuries? How can an ad even cause injury?

This guide will walk through the advertisement side of personal and advertising injury insurance, answering these questions and explaining all you need to know about advertising injury insurance.

What’s an advertising injury?

A smaller part of the broader category outlined above, advertising injury is a specific type of personal injury that involves the act of advertising. Advertising injury insurance covers lawsuits brought against your business in the event that advertising you put out caused injury to another party—usually another business and its intellectual property.

What kinds of advertising can get you sued?

When it comes to what kinds of advertising injury you can inflict on another person or business, there are three main kinds to look out for:

Insult – Advertising that presents false, harmful information about the claimant’s person or business may get you sued for defamation or disparagement.

If It’s about the reputation of a person or entity, it’s defamation.
If it’s about an economic interest (goods, services, etc.), it’s disparagement.
In terms of defamation, it’s called libel if it’s written and slander if it’s verbal.

Imitation – Advertising that copies another person’s or business’ advertising idea or trade dress, or otherwise infringes upon another’s copyright, may be grounds for a lawsuit. This is also referred to as trademark infringement.

Copyright is the most straightforward—if someone else owns a copyright, you need their permission to reproduce it, as the originator retains intellectual property rights to their creation.
Trade dress means how a product looks, including its packaging. You need permission to make similar-looking products to avoid copyright infringement.
Advertising idea refers to a general concept of advertising, such as a particular kind of image within a similar kind of ad. You need permission for using the same ad concepts as your competitors.

Intrusion – Advertising that violates a third party’s right to privacy may be grounds for a lawsuit.

If you disclose confidential information in an advertisement or broadcast, you may be sued.

These definitions are somewhat broad, and there’s lots of room for interpretation. That means, unfortunately, that there’s lots of room for risk and exposure. That’s why you need insurance (specifically general liability insurance coverage), to protect you from legal and other fees associated with these kinds of lawsuits.

But it’s important to note that not every circumstance is covered. Which leads us to our next point:

Exclusions and exceptions

There are always gaps in insurance coverage, or things that aren’t or can’t be covered because of existing laws. In terms of advertising injury coverage, some of these gaps in any given policy are for:

Criminal behavior – Anything that’s a criminal offense isn’t covered.
Contractual matters – Similarly, claims that your ad broke a contract, or that a contract you signed is involved in advertising injury, aren’t covered.
Known falsification or violation – If you knowingly misrepresented information, presented false information, or violated another’s right to privacy, you’re not covered by policy.
False advertising – Lawsuits involving false advertisement of goods or services aren’t covered.
Special parties – Certain parties’ advertising isn’t covered by general liability because it requires specialty insurance, like media liability coverage.
- Advertising agencies, web designers, and other entities that make ads and public-facing documents aren’t covered.
- Publishing companies, internet service providers, and other entities that host ads for others aren’t covered.

And, of course, as mentioned above, personal advertising injury only covers ads. So, it’s important to understand exactly what an ad is (as far as insurance goes).

What counts as advertisement?

The definition of “advertisement” you’ll see in insurance policies is usually one that’s similar to the Insurance Services Office, Inc. (ISO) definition:¹

“A notice that is broadcast or published to the general public or specific market segment about your goods, products, or services for the purpose of attracting customers or supporters.”

If you find that definition confusing, you’re not alone! The murkiness of exactly what an ad is has been confusing for many people, including the attorneys and courts whose job it is to litigate these claims.

For that reason, it’s best to practice caution.

Here are some of the clearest examples of advertisements, for the purposes of advertising injury insurance:

Paid ads on TV, in newspapers, on the radio, etc.
Paid banner, pop-up, and other ads on websites, blogs, etc.
Promoted posts and results on social media, search engines, etc.
Direct mail ad campaigns like email blasts, home mailers, etc.
Marketing, including street marketing, sales calls, etc.

That last one might be scary, and it should be! You can be sued for injury coming from all different kinds of advertising and marketing, regardless of the scope, scale, type, or target. Keep that in mind as you advertise… and shop for an insurance policy with adequate coverage.

If you need coverage for that ad you put out comparing your rival pizzeria to a fast food restaurant, or you want to make sure you’re protected in case someone trips over a shoebox in your boutique lending to bodily injury and medical expense, you only pay for that coverage when you need it.

Avoid hurting yourself with the right personal injury coverage

When you’re spreading the good word about your business, promoting yourself via ads, broadcasts, and other public-facing media, it can be easy to overstep a boundary and expose yourself to risk. That’s just a part of running a business. No matter how professional you try to be, we’re all still human.

And no matter how careful you are, it’s easy to cross the line. If you make public statements about other businesses, you never know if the information you’re using is accurate or if it’s a case of sharing a trade secret or data breach. You never know what might rub someone the wrong way. That’s out of your control.

Don’t let an honest mistake harm your business. Take control of what you can and get yourself covered.

Sources:

The Balance. Advertising Injury Coverage.

Our editorial content is intended for informational purposes only and is not written by a licensed insurance agent. Terms and conditions for rate and coverage may vary by class of business and state.

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