Small Business Saturday Advertising Loss Prevention

Whether its Black Friday, Small Business Saturday, or Cyber Monday a good majority of businesses have amped up their promotions this month in anticipation or hopes of winning a percentage of the annual uptake in spending.  Even in our service oriented business to business enterprise, there is an increased level of opportunity as companies who are setting 2015 budget or have January 1 insurance policy renewals are more open to hearing what opportunities may be available.  This is an appropriate time to integrate a little bit of risk management into your small business marketing plan.

Unless you agree to specifically exclude it, your general liability will come with personal and advertising injury coverage equal to your general liability occurrence limit.  Advertising injury insurance claims can include copyright or trademark infringement, libel, slander, or invasion of privacy. It should also cover misappropriation of advertising ideas. Here are some tips for dealing with two advertising injury insurance claims frequently experienced by small business.

In recent years many small businesses have been contacted by companies like Getty images regarding the use of photos on their websites.  The claim brought by companies like Getty Images, is an advertising injury insurance claim under most policy interpretations.  Some policies will exclude your blog and website from coverage especially if there is not a call to action or information regarding pricing, products, and services.  However, if it is not excluded on this basis, it will likely be covered.  A small business can minimize its risk for this type of claim by reading the service contract.  The service contract will outline who is responsible for the content that is on the website.  If the contract shifts this burden to the small business owner, loss prevention would include knowing the source, usage and licensing rights for the content on your website, especially images.  

Libel and slander claims are normally raised by competitors.  With cellular companies and computer manufacturers frequently comparing their products to the competitors many small businesses may be emboldened to do so as well.  In fact such comparisons are particularly effective for those small businesses who are entering a new market and need to distinguish themselves from incumbents.  Truth in advertising will limit the success of these claims and also bolster the effectiveness of your small business advertising efforts.  Language which refers to competitor products should be factual and easily confirmed and should.  

Lastly, misrepresentation suits can be frequently lodged against small businesses by irate consumers.  Misrepresentation is often excluded from general liability policies.  however, your insurance advisor may be able to present your claim so that is more clearly determined to be an errors and omission or professional liability claim for which there is coverage.  For example, client alleges that fitness trainer promised she would lose 15 pounds and she only lost 5.  The promise could be captioned as a misrepresentation claim but the onus of the issue is the failure to provide services to the standard of a similar professional.  Again, truth is the defense here, no matter how the claim is captioned, if there is any proof that you intentionally participated in wrongdoing it will negate any coverage under whatever policy you may have.