Your small business is more than just your job. It’s your livelihood. And one of the best ways to help it grow is word-of-mouth referrals. Whether it’s customers making recommendations to their friends or your employees stewarding your brand, getting your business’s name out there can help attract new customers.
However, not all exposure is good exposure. When trying to sing the praises of your own company, it may appear to others to be at the expense of a competitor. This is where personal and advertising injury coverage comes in.
In this article, we’ll explore what small business owners need to know about personal and advertising injury, including what it is, how to avoid it, and steps to consider if you’re accused of it.
Personal and advertising injury coverage is a component of general liability insurance. Since 1998, personal injury and advertising injury have been combined into what is known as Coverage B. Let’s break general liability Coverage B down into its respective parts.
According to the International Risk Management Institute, personal injury would include the following:
Advertising injury specifically deals with injuries in the form of — you guessed it — advertising. The International Risk Management Institute states that advertising injuries would include the following in advertisements:
Given how specific it is, personal and advertising injury coverage may seem a bit niche. But it can help protect you and your business in a number of ways. If, for instance, your business misrepresents another business, causing it potential financial losses, personal and advertising injury coverage may help financially protect your business (up to your policy limits).
Coverage B is there in the event your business is obligated to pay damages for libel, slander, and other personal and advertising injuries, for example. The coverage may also pay for legal expenses relating to a personal and advertising injury lawsuit.
One scenario that could potentially lead to a personal injury is if a shop owner falsely believes that a customer has shoplifted. If you or another employee detains the shopper in question to wait for authorities and it turns out your suspicions were unfounded, that would likely be considered false detainment. You could be liable for damages if the shopper takes legal action.
Another example is the real-life case of Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc. In this case, Dun & Bradstreet erroneously reported that Greenmoss Builders had filed for bankruptcy. This error was potentially damaging to Greenmoss Builders’ business.
For a real-world example of advertising injury — specifically, copyright infringement — look at the case of Rogers v. Koons. In this case, photographer Art Rogers took and sold a photograph of a couple holding puppies. Artist Jeff Koons used the image as the inspiration for a statue for an art exhibit. The court ruled that the photograph and statue were, indeed, similar enough to qualify as copyright infringement.
Another example can be found in Vitamin Energy, LLC v. Evanston Insurance Company. Vitamin Energy was sued by a competing energy drink brand for false and misleading advertising. When Evanston Insurance, Vitamin Energy’s commercial general liability insurance carrier, refused to cover the company, Vitamin Energy appealed that the original claim fell under the umbrella of advertising injury. The court ultimately agreed, and Evanston Insurance was directed to cover the related costs.
General liability Coverage B may cover a wide variety of personal and advertising injury claims, but it does have limitations. The following are common exceptions that are not covered — or may not be fully covered — under Coverage B.
Your general liability insurance carrier will not provide coverage if the harm was intentional on your part. This could include purposely slandering a competitor or printing information about them that you know to be false.
Any claims of property damage or bodily harm would likely fall under Coverage A of general liability policies and are not considered personal or advertising injuries. If an employee experiences bodily injury or illness, it may fall under a general liability policy, but not as personal and advertising injury.
Your personal and advertising injury coverage may not fully cover the total expenses from your claim. Your policy will have monetary limits, and a more serious claim may exceed those limits.
If the personal or advertising injury precedes the inception of the general liability insurance policy, the insurance carrier will not cover the expenses.
If the insured’s offense includes criminal behavior, the expenses will likely not be covered under Coverage B.
Any liability that has been previously assumed by the insured through a contract or official agreement will likely not be covered. The parameters of this exception, however, can get tricky. More details can be found here.
Every business owner knows: anything can happen. Running a small business can be complicated and unpredictable. You can’t prepare for accidents, and communication issues can lead to greater problems down the line.
That’s where we come in. While not every policy will include personal and advertising injury coverage, general liability insurance can help keep your business financially safe and — when the unpredictable happens — prevent you from being required to foot the bill. Simply Business partners with small business owners to find coverage that works for them. Start your general liability insurance quote online today.
Navigating the murky waters between healthy competition in advertising and libel can be tricky. Owners of small businesses know the importance of promoting their goods and services. It’s easy, however, to find yourself in risky situations where the line between what is fair and factual and what is exaggerated or inaccurate can become unclear.
When in doubt, take a step back and ask if what you’re saying or doing is based on verifiable facts or if it’s speculation. Consider the situation from all perspectives. It doesn’t hurt to think about how you would respond if someone said the same thing about you. But if you do find yourself in a difficult spot due to a personal or advertising injury, Coverage B has you covered.
After several years of working in insurance while also freelance writing, I've finally found where the two interests intersect. I'm a writer with Simply Business with an insurance processing background and a love of research.
Kristin writes on a number of topics such as small business trends, license reciprocity, and BOP insurance.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.