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What Is Advertising Agency Insurance?
Your media and advertising agency faces unique risks. Advertising agency insurance, another name for professional liability insurance, is a type of business insurance that can help protect your agency against these risks.
Let’s say your advertising agency makes a mistake while working on a campaign for one of your clients. Did you realize they can sue you if they suffer a financial loss due to that mistake? Even if your ad agency didn’t actually make a mistake, your client can still sue you just because they believe you made one.
That’s why it’s so important to have professional liability insurance. Lawsuits can happen for any reason at any time, and having the right coverage can help protect you and the business you’ve worked so hard to build.
Advertisers Liability Insurance (Professional Liability)
Professional liability insurance can go by many different names, including:
- Advertisers liability insurance
- Errors and omissions insurance
- E&O insurance
They all refer to the same type of coverage, and they all help protect your business against the same risks.
Advertising Liability Insurance Definition
Professional liability insurance helps protect your ad agency from lawsuits if a client claims you made a mistake or failed to deliver what you promised. This coverage can help cover your legal costs if a client sues you for:
- Negligence
- Violation of good faith and fair dealing
- Misrepresentation
- Inaccurate advice
Even though their names are similar, don’t confuse professional liability insurance with general liability insurance. These are two very different types of business insurance, and they protect you against different types of lawsuits. General liability would help protect your business from claims and lawsuits for:
- Lesiones corporales
- Daños a la propiedad
- Personal and advertising injury
- Malicious prosecution
- Libel
- Slander
Advertising Liability Coverage
Professional liability insurance can help protect your ad agency if a client sues you for mistakes like:
- Not completing a project according to the contract
- Making an error in a print ad
- Giving wrong advice that caused them to lose money
If your client sues you for mistakes like these, E&O insurance for an advertising agency can help cover costs like:
- Lost earnings if you can't run your business because you're spending time at a trial.
- Disciplinary hearings called by licensing, regulatory or other government agencies for professional misconduct.
- Judgments, damages and settlements resulting from lawsuits over the services you provided.
What Advertisers’ Liability Insurance Doesn’t Cover
Advertisers’ liability insurance doesn’t cover every type of claim made against your business. It only protects your agency from lawsuits related to your professional services. If you’d like to protect your ad agency from other claims, you can also get these types of business insurance:
- General liability insurance helps protect your agency from claims of bodily injury or property damage.
- Commercial property insurance helps protect the physical location of your agency and its business equipment.
- Data breach coverage helps cover your costs if personally identifiable information gets lost or stolen.
- Workers’ compensation insurance gives your employees benefits if they get a work-related injury or illness.
It’s also important to know that many insurance companies write professional liability insurance policies on a claims-made basis with a retroactive time frame. This means that if a client makes a claim against you for something that happened before your policy’s retroactive date, your policy won’t cover it.
Estimating the Cost of Advertisers Liability Insurance
There are many different factors that can affect your cost for advertisers liability insurance, including your:
- Location, because some states have minimum coverage requirements that can increase your insurance cost.
- History, especially if you’ve faced many claims and lawsuits in the past.
- Agency size, because the more employees you have, the more it can cost for coverage.
- Policy terms, like choosing a higher coverage amount or earlier retroactive date.
- Clients and contracts, because the more clients your ad agency has, the more likely it is one of them may sue you.
Get a Quote on Advertising Agency Professional Liability Insurance
No matter how well you try to run your ad agency, mistakes can happen. Professional liability insurance is an important coverage to help protect your agency from costly lawsuits.