In running a business, there are instances when the things you say are interpreted differently, mostly negatively, even if you really mean well. While you can always claim that you know the truth and you will not be bothered by those baseless accusations, there are times when these things can be pretty damaging. They can even lead to lawsuits. This is the reason why you need to get personal and advertising injury coverage.
This type of insurance protects you against various acts that are beyond your usual physical damage claims. This may form part of your business’ commercial liability policy or it may be a separate coverage. The injuries protected in this case are those suffered by third parties due to the advertisement of the goods and services provided by your business.
Personal and advertising injury insurance comes in handy when for instance, a competitor accuses you of making a false claim about its product in an advertisement, in practice or through a comment of your staff and that such false claim damaged its business.
- Infringement of copyright
- Misappropriation of claims
- Unfair competition claims
- Invasion of privacy
- Trademark claims
You have to remember that these acts are protected only if they are done in relation to business advertising. Advertising is commonly defined as broadcasting or publishing to the public or a specific market segment about the goods, services or products of your business to attract supporters or customers. Note that this definition may vary depending on your policy.
- When you knowingly violate the rights of another such as when you use an image owned by another party without the latter’s consent.
- When your business contractually assumes advertising liability
- When you knowingly and intentionally publish false or misleading information
- When you make a mistake in advertising the quality, performance or price of your product or service
- Criminal acts such as criminal trademark and copyright infringements
- Contents in bulletin boards and electronic forums hosted by your business
- Spam or mass electronic advertising.
The exclusions may vary depending on your policy. Thus, you should discuss this thoroughly with your insurance company.
Separate Coverage Required
While personal and advertising injury insurance can form part of your commercial liability policy, some insurance companies require certain businesses to obtain a separate coverage or endorsement to be fully protected against this type of injury. This is in recognition of the higher risks that these businesses are exposed to. These businesses include the following:
- Advertising companies
- Website publishers and designers
- Internet service providers.
Note that these companies should be primarily engaged in the businesses listed above. Performance of the acts mentioned will not automatically classify you as being engaged in such business if such is only incidental to your business’ primary purpose. Thus, if you run a restaurant and you create a website for your business, this does not mean that you are already an advertising company or a website designer and publisher. The contents of your website will still be covered by your personal and advertising injury coverage.