Advertising Agency Insurance Policy Information
Advertising Agency Insurance. Advertising agencies develop or design advertising and promotional materials for a client. They may work with the client in developing an overall marketing strategy to promote brand awareness of the client's products or services, including market research.
The agency may develop various types of audio, visual, or printed material, including brochures, logos, themes, trademarks, jingles or musical compositions, radio or television commercials, or online communications. Advertising agencies often purchase advertising space in periodicals, billboards, or air time on behalf of their clients.
As an advertising agent, you engage in work each day that is both challenging and creative, and you have a responsibility to the clientele that you serve to give them your all. Clients fully expect that you will increase their sales or boost their reputations and image. If you fail to do this, then you may find yourself on the receiving end of a negligence claim, especially if your client experiences financial damage due to promises you made but failed to deliver upon.
For this reason, it is important for your business to maintain the right advertising agency insurance at all times.
Advertising agency insurance protects your company from lawsuits with rates as low as $37/mo. Get a fast quote and your certificate of insurance now.
Below are some answers to commonly asked advertising agency insurance questions:
- What Is Advertising Agency Insurance?
- How Much Does Advertising Agency Insurance Cost?
- Why Do Advertising Agencies Need Insurance?
- What Type Of Insurance Do Advertising Agencies Need?
- What Are Advertising Agencies Risks & Exposures?
- What Does Advertising Agency Insurance Cover & Pay For?
What Is Advertising Agency Insurance?
Advertising agency insurance is a type of insurance coverage specifically designed for companies in the advertising industry. It typically includes coverage for general liability, errors and omissions, and professional liability.
This insurance protects the agency from financial loss due to claims of negligence, wrongful acts, or breaches of contract in the course of providing advertising services to clients. It can also cover the cost of defending against such claims and any damages that may be awarded.
Additionally, it can also include coverage for property damage, loss of business income and cyber liability.
How Much Does Advertising Agency Insurance Cost?
The average price of a standard $1,000,000/$2,000,000 General Liability Insurance policy for small advertising agencies ranges from $37 to $59 per month based on location, size, payroll, sales and experience.
Why Do Advertising Agencies Need Insurance?
Advertising agencies need insurance to protect their business and employees from various risks and liabilities that may arise in the course of their operations. These risks may include financial losses due to unexpected events such as natural disasters or accidents, legal liabilities arising from errors or omissions in their work, and claims for defamation or copyright infringement.
Having insurance can provide a sense of security and peace of mind for the agency and its employees, knowing that they are covered in the event of any unforeseen circumstances. It can also give clients confidence in the agency's ability to handle risks and handle any potential issues that may arise during a project.
Insurance can also help an advertising agency to recover from financial losses and continue operating in the event of a disaster or unexpected event. Without insurance, an agency may be unable to afford the costs of recovering from a loss, which could result in the closure of the business.
Overall, advertising agency insurance is an essential component of any advertising agency's risk management strategy, providing protection and security for the business and its employees.
What Type Of Insurance Do Advertising Agencies Need?
Professional Liability Insurance
As an advertising agency, your business may find itself accused of making errors or running ill-devised campaigns. Some clients are difficult to please, but no one is perfect. Omissions, errors, negligence and oversight do occur, even when you or your staff are giving it your all. Mistakes are part of life, and this is doubly true in the deadline-heavy and quick-paced environment of the ad agency.
When a client puts his trust in you to portray an image to the public, and you subsequently let the client down, then he may have a good reason to sue you. Failing to provide the services that you promise can spur a lawsuit, and even if the claim is unfounded, you still need to pay for a defense. Errors and omissions insurance or professional liability insurance can help pay not only the cost of hiring an attorney, but also any judgement obtained against you as a result of claims arising.
These claims include accusations of defamation of character, libel, slander, copyright infringement, and infliction of emotional distress. Failure to deliver products or services, mistakes leading to financial loss, and other types of professional negligence may also lead to advertising agency insurance claims.
For example, you may find yourself facing a lawsuit if you:
- Make a mistake in the wording of an advertisement, and the mistake causes your client a financial loss or loss of reputation.
- Design a campaign that does not increase sales for the company as contractually promised.
- Failure to get the right usage license for a photo that you use, causing the client to be sued himself.
- Your advertisement is viewed as slanderous to a client's competitor.
With professional liability insurance for your ad agency, you protect your business and yourself from the costs that come with lawsuits, even if the suit is deemed a lacking merit or unfounded. This includes settlement, court costs, and other related expenses.
Media Liability Coverage
Media liabilityis a type of errors and omissions (E&O) liability insurance designed for publishers, broadcasters, and other media-related firms. The policies are typically cover the following broad areas: defamation, invasion of privacy, infringement of copyright, and plagiarism.
General Liability, Workers Comp & Commercial Property
Just like any other business, your advertising agency is subject to liability and property risks. Advertising agency insurance can address these risks and provide a layer of protection to guard your business from potential financial pitfalls. Unplanned events can really threaten the financial livelihood of your business if you fail to maintain the right levels of advertising agency insurance coverage to protect you against:
- Slip-and-fall injuries
- Wind, hail and other types of storm damage
- Damage from fire and smoke
- Loss from theft
- Damage from vandalism
- Injuries to employees on the job
Business Owners Policy
When you work closely with a commercial agent who understands your business model and the inherent risks involved with your business, then you can be assured that the coverage you choose is the right level and type for your needs.After reviewing your needs, your agent may recommend a bundle of basic coverage types for your particular business. These BOP policies (business owner's policy) packages provide affordable yet comprehensive coverage for your business that usually includes property coverage for your actual physical location and the contents contained therein; this includes your office building, computers, equipment and any furniture. It will protect both owned and leased assets.
BOP policies also provide business interruption coverage. This coverage compensated your business for any lost income due to a covered peril and for operating expenses that you continue to have after closing the business due to a covered event. In addition, BOP policies give you liability coverage to pay for any bodily injury or property damage claims you may face. This includes third-party damage caused by your or your employees' negligence. For instance, if a client becomes injured on your business' premises, this policy kicks in to cover your financial responsibilities to the client.
Additional endorsements may also be needed. This might include electronic data processing coverage. This pays for lost data or any resulting lost income when your computer system or network is damaged due to vandalism, theft, computer malware or viruses. Cyber liability is also often recommended by seasoned agents. This type of policy covers any sort of data breach that occurs that jeopardizes stored data. It can help you pay for the cost of any investigation and public relations resulting from such an occurrence.
Additional Coverages For Advertising Agencies
Consider a commercial umbrella insurance policy. This 'excess liability' policy goes above and beyond the initial policy limits of your other policies. If you ever face a major lawsuit that is not covered in its entirety by your existing policy, your umbrella policy can help deter those costs.
What Are Advertising Agencies Risks & Exposures
Premises liability exposure may be limited to that of an office. If clients visit the premises, they must be confined to customer waiting areas and designated conference areas. To prevent slips, trips, and falls, all areas must be well maintained with floor covering in good condition. Exits must be sufficient in number, be well marked, and have backup lighting in case of power failure.
Parking lots and sidewalks need to be in good repair with snow and ice removed, and generally level and free of exposure to slips and falls. Off-premises exposures arise from sales visits, training sessions, and any production sites used for photography or filming. The areas should be secured to prevent injury to the general public, who may trip over equipment or power cords, be struck by falling objects, or come into contact with electrical hazards. Contracts must be in place for all actors and locations to identify responsible parties in the event of a loss.
Professional liability and advertising liability exposures are high as advertising agencies work with clients to present their products and services in the best possible light. The advertising content may include statements regarding what the product will do and how it will perform. Additional exposures include allegations of copyright or trademark infringements or misleading statements made about competitors. Agencies that purchase ad space or air time for their clients may be held responsible for costs associated with misleading product data, such as wrong prices or incorrect specifications.
Workers compensation exposures may be limited to those of an office. Potential injuries from working with computers include eyestrain, neck strain, carpal tunnel syndrome, and similar cumulative trauma injuries that can be addressed through ergonomically designed workstations. Work with electrical equipment may result in shocks and burns. Off-site work exposures may include sales presentations, photo and film production, and similar activities. Travel may be extensive, either inside or outside the United States. Off-site production can involve rough or unfamiliar terrain that can result in slips, trips, or falls.
Carrying heavy equipment can result in back strains or sprains. Injuries can result from working with electrical equipment, automobile accidents, and contact with animals, clients, or the general public. If employees work overseas, the potential for injury can be very high due to lack of control over exposures. Special foreign coverage may be required. If an employee is injured in another country, the cost of returning home could be extremely high. Repatriation expense coverage is recommended.
Property exposures may be limited to that of an office, or there may be extensive operations in the production of photographic, graphic design, audio, visual or works of art for clients. Ignition sources include electrical wiring, heating, and air conditioning systems, wear, and overheating of equipment. Property values can be concentrated in high-tech electronic equipment at the main location.
Audio and photography equipment is valuable and may be a target for thieves. Appropriate security controls should be taken including physical barriers to prevent entrance to the premises after hours and an alarm system that reports directly to a central station or the police department. Off-premises exposures may include equipment kept at homes of employees and representatives carrying portable computers and display equipment.
Equipment breakdown exposures are from the breakdown of heating and air-conditioning equipment. Breakdown of climate control systems may cause serious loss, especially to artwork.
Crime exposures are from employee dishonesty. Advertisers frequently have access to their clients' proprietary information, which may include personal information about the clients, their employees or customers. Hazards increase without proper background checks, along with monitoring procedures and securing of all records to prevent unauthorized access. All billing and disbursements must be handled by separate individuals and reconciled on a regular basis. Audio and photography equipment are valuable. Some types are relatively small and easily concealed. Equipment must be inventoried regularly.
Inland marine exposures include accounts receivable if the agency offers credit, bailees' customers for the property of clients, computers, and valuable papers and records for clients' and vendors' information. A special floater may be needed if the property is taken to off-site production locations. Clients' records and art are typically originals that are difficult or expensive to re-create.
There may be a morale hazard if the agency does not keep valuable papers and disks in fireproof file cabinets to protect them from smoke, water, and fire. Power failure and power surges are potentially severe hazards. Duplicates should be kept off-site to allow for re-creation following a loss.
Business auto exposure may be limited to hired and non-owned, including the use of rental cars. If vehicles are supplied to employees, there should be written procedures regarding personal use by employees and their families. All drivers must have appropriate licenses and acceptable MVRs. Vehicles must be maintained, and records kept in a central location. If there is an overseas auto exposure, foreign coverage may be required.
What Does Advertising Agency Insurance Cover & Pay For?
Advertising agencies make various claims in their ads to promote products or services, and sometimes these claims can lead to lawsuits if they are deemed false or misleading. Here are some examples of advertising agency claims and how advertising agency insurance can help pay for the lawsuit:
Claim: "Our product is 100% natural."
Insurance coverage: If a lawsuit is filed claiming that the product contains synthetic or harmful ingredients, advertising agency insurance can provide coverage for legal defense costs and damages.
Claim: "Our service will improve your credit score by 100 points."
Insurance coverage: If a customer sues the advertising agency for false advertising because the service did not result in the promised improvement, advertising agency insurance can help pay for legal defense costs and damages.
Claim: "Our product is the best on the market."
Insurance coverage: If a competitor files a lawsuit for false advertising because they believe their product is better, advertising agency insurance can help pay for legal defense costs and damages.
Claim: "Our product is backed by scientific research."
Insurance coverage: If a lawsuit is filed claiming that the scientific research is fraudulent or misleading, advertising agency insurance can help pay for legal defense costs and damages.
Claim: "Our service is guaranteed to eliminate all your wrinkles."
Insurance coverage: If a customer files a lawsuit claiming that the service did not eliminate their wrinkles as promised, advertising agency insurance can help pay for legal defense costs and damages.
Overall, advertising agency insurance can provide protection for the various risks and liabilities associated with making claims in advertising campaigns. It's important for advertising agencies to have this insurance coverage to safeguard their business and reputation.
Commercial Insurance And Business Industry Classification
- SIC CODE: 7311 Advertising Agencies, 7312 Outdoor Advertising Services, 7319 Advertising, Not Elsewhere Classified
- NAICS CODE: 541810 Advertising Agencies
- Suggested Workers Compensation Code(s): 8810 Clerical Office Employees NOC, 8742 Salespersons or Collectors - Outside, 9554 Sign Installation, Maintenance, Repair, Removal, or Replacement NOC - Away From Shop & Drivers
Description for 7311: Advertising Agencies
Division I: Services | Major Group 73: Business Services | Industry Group 731: Advertising
Establishments primarily engaged in preparing advertising (writing copy, artwork, graphics, and other creative work) and placing such advertising in periodicals, newspapers, radio and television, or other advertising media for clients on a contract or fee basis.
- Advertising agencies
- Advertising consultants (agencies)
Description for 7312: Outdoor Advertising Services
Division I: Services | Major Group 73: Business Services | Industry Group 731: Advertising
7312 Outdoor Advertising Services: Establishments primarily engaged in the preparation of poster displays and painted and electric spectacular displays on billboards, panels, bulletins, and frames, principally outdoors. Such establishments may construct, repair, and maintain display boards and may post advertisements.
- Billboard advertising
- Outdoor advertising service
- Poster advertising service, outdoor
Description for 7319: Advertising, Not Elsewhere Classified
Division I: Services | Major Group 73: Business Services | Industry Group 731: Advertising
7319 Advertising, Not Elsewhere Classified: Establishments primarily engaged in furnishing advertising services, not elsewhere classified, such as aerial advertising, circular and handbill distribution, distribution or delivery of advertising material or samples, and transit advertising.
- Aerial advertising
- Bus card advertising
- Circular distributing service
- Coupon distribution
- Display advertising service, except outdoor
- Handbill distribution service
- Media buying service
- Poster advertising service, except outdoor
- Samples, distribution of
- Shopping news advertising and distributing service
- Sky writing
- Taxicab card advertising
- Transit advertising
Advertising Agencies Insurance - The Bottom Line
Work with your broker to provide information about your business and get quotes for your advertising agency insurance based on your specific situation, risks, and risk tolerance.
Additional Resources For Advertising, Marketing & Media Insurance
Learn about small business media liability insurance - a specialized form of professional liability insurance that provides protection for legal claims brought by third parties.
- Advertising Agency
- Book Publishers
- Call Center
- Direct Mailing Services
- Graphic Arts
- Graphic Designers
- Magazine Publishers
- Market Research Firm
- Marketing Consultant
- Podcast Insurance
- Printers & Publishers
- Public Relations
- Radio Stations
- Search Engine Services SEO
- Social Media Consultant
- Television Stations
The advertising and marketing industry is a fast-paced and constantly evolving field that involves creating and promoting products or services to consumers. This industry is constantly trying to stay ahead of trends and attract new customers, and as a result, it is prone to risks and uncertainties.
One of the biggest risks that the advertising and marketing industry faces is the potential for legal disputes. For example, a company may be sued for false advertising, copyright infringement, or for using someone else's intellectual property without permission. These types of legal disputes can be costly and time-consuming, and they can damage a company's reputation.
Business insurance is an important tool for protecting businesses in the advertising and marketing industry from these types of risks. Insurance can provide financial protection in the event of a legal dispute, which can help a business to avoid financial ruin. Additionally, insurance can help to protect a business's reputation by helping to manage the cost and impact of any negative publicity.
In addition to legal risks, the advertising and marketing industry is also at risk of financial losses due to errors and omissions. For example, a marketing campaign may not be successful, or a company may make a mistake in the production or distribution of a product. These types of errors and omissions can be costly, and insurance can help to protect a business from these types of losses.
Overall, insurance is an important tool for protecting businesses in the advertising and marketing industry from the various risks that they face. It can provide financial protection in the event of legal disputes or financial losses, and it can help to protect a company's reputation and financial stability.
Minimum recommended small business insurance coverage: Building, Business Personal Property, Business Income with Extra Expense, Employee Dishonesty, Money and Securities, Accounts Receivable, Bailees' Customers, Computers, Valuable Papers and Records, General Liability, Employee Benefits Liability, Professional and Advertising Liability, Umbrella Liability, Hired and Non-owned Auto Liability & Workers Compensation.
Other commercial insurance policies to consider: Earthquake, Equipment Breakdown, Flood, Computer Fraud, Forgery, Special Floater, Cyber Liability, Employment-related Practices Liability, Business Automobile Liability and Physical Damage, Foreign Automobile Liability and Physical Damage, Foreign Workers Compensation, Repatriation Expense and Stop Gap Liability.