You've probably bought commercial liability coverage to make sure you won't lose your business because a customer or client slips and falls -- and sues. That's a great reason -- the cost of slip-and-fall incidents averages nearly $24,000. But commercial liability coverage doesn't stop there -- most policies also cover "personal and advertising injury coverage."
Advertising injury coverage? No, it doesn't protect you if an actor trips and falls while filming a television commercial, or if someone taking a print ad to a newspaper or magazine gets in a wreck and breaks an arm.
It instead protects you from the actual words in an advertisement. Legally, advertising injury is defined as something arising from a business' advertising about its products and services that causes injury to a third party (Tweet This!).
How can an ad injure someone?
Advertising injury can occur in a number of ways, including trademark or copyright infringement, an invasion of privacy, libel, and slander. One of the most common ways an "injury" occurs is through comparative advertising. A competitor could say the company's business has been hurt because your advertising includes a logo or photo showing its product and makes a false claim about the product.
That means you could face a variety of lawsuits. Grounds could include the following -- trademark infringement, defamation, even libel.
How would advertising injury coverage help? If something like this happens to you, your commercial liability coverage would help provide legal defense for the lawsuit and any award ordered in the case, up to your policy limits.
The cost? Advertising injury coverage typically is part of a standard commercial liability policy, which you need anyway. The cost of a policy, according to the Small Business Administration, can range from $750 to $2,000, depending on a company's operations and coverage needs (Tweet This!).
When advertising injury coverage won't help
One fact to note, however, is that advertising injury coverage won't help you in every situation arising from your commercials or print ads. Policies general exclude the following situations:
- Intentionally publishing false information. If you meant to publish the bad information in an ad or commercial, you are not protected. Any claim will be denied (Tweet This).
- Violating the rights of someone intentionally. If you publish a photo of someone in your ad, which indicates endorsement by that person, and you do not have permission, you won't be protected in an invasion of privacy or other claim.
- Price and performance claims. Say you sell boats, and your advertisement lists the price of your special of the week as $1,000 -- but the printer goofed and it was supposed to say $21,000. Because a valued customer wants the deal, you decide to honor the price but then seek to recover the lost $20,000 in an insurance claim. Generally, claims made for damages because of mistaken price or performance claims are not honored.
- Information posted on electronic forums. If your company hosts an online forum, you could be held liable for information users post there, and claims arising from posts usually aren't covered by advertising injury coverage.
In addition to advertising injury coverage, some commercial liability policies include other types of help, including cyber-liability and data-breach protection. Ask your agent for a thorough breakdown before you buy a policy. That way, you'll know exactly what's in your coverage. If you're still concerned, consider an umbrella policy to expand your liability protection further against a number of threats.
Carrie Van Brunt-Wiley is the editor of HomeownersInsurance.com.
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