How advertising can get you in trouble
- Advertising injury protection is covered under commercial general liability insurance
- It protects against claims related to libel and slander
- Advertising injuries include plagiarism and copyright/trademark infringement
- They also include privacy violations
If you do any form of professional advertising or posting on a company social media account, you have to be careful of committing advertising injuries. Although this type of injury is not as well-known as other types of liability, it’s important to understand personal advertising liability, since breaking the rules could result in a lawsuit or fines.
While you might think only large corporations get sued for things like copyright infringement, it can happen to small businesses, too. We’ll explain the specifics of advertising injuries, policies that can help you avoid trouble, and what to do if you’re sued.
Understanding advertising injuries
An advertising injury refers to a harmful act committed in the course of advertising. The offense can be made by a company or an individual and it may happen in print, radio, television, or social media. These injuries can result in financial losses for the affected party due to reputational damage. The wronged party can turn around and sue your company or you personally, seeking damages.
Luckily, there’s coverage that protects your business against advertising injury claims. It’s part of your commercial general liability insurance (Coverage B).
Types of advertising injuries
To stay out of trouble, you need to know what to avoid. Claims and lawsuits can stem from several categories under personal and advertising injuries, including:
- Libel, slander, or product disparagement
- Violating rights of privacy
- Using another company’s ideas in your advertisement
- Copyright infringement, trade dress, or slogans in your advertisements
So, what are some things you (or your company/employees) might do that could put you at risk of a lawsuit or claim?
1. Using logos or other trademarked images
A trademark can be applied to a logo, image, phrase, word, or symbol that’s tied to a specific product, brand, or company. Companies and individuals can register these items to protect their products, intellectual property, computer programs, and advertising concepts.
Examples of trademarks:
- Nike swoosh
- Target logo
- NBC peacock
- Words like the “Super Bowl”
- Product names like iPad, Band-Aid, Kleenex, Big Mac/Whopper
- Capital One’s: “What’s in your wallet?” slogan
- Characters like Mickey Mouse, Superman, Bugs Bunny, Marvel characters, etc.
- Words under copyright by an author, publisher, or company
- Images under copyright by a photographer, publisher, or company
Using a trademarked item in your advertising – even in a Facebook post – can constitute an advertising injury. Even if the post is positive, you can still get in trouble if the other company objects to the use of its images, name, or company info being used without its consent.
2. Using someone else’s idea in your advertising
Let’s say a rival uses an image or concept in an ad or social media post and you think it’s clever or funny. Maybe the idea is so effective that the other company sees a big jump in sales or a boost in publicity. In fact, the idea is so good that you decide to use it in your next ad campaign or post. In effect, you’re “stealing” that company’s idea and using it as your own.
This could result in an advertising injury claim or lawsuit.
3. Disparaging or slandering your competitors
Let’s say you run a popular sports bar. Another sports bar opens up a few blocks away and you start to lose customers. So, you put out an ad or social media post claiming your rival’s ingredients are of poor quality and their food tastes bad. This constitutes defamation or slander and you can be sued, even if you believe what you’re saying is true.
Defamation is any false or derogatory statement made about another company’s goods, products, or services that is intended to convince customers not to buy from that company/person.
There are two types of defamation:
- Libel – Defamation in writing or other visible media
- Slander – Verbal defamation
4. Violating privacy rights
Invasion of privacy is defined as “the unjustifiable intrusion into the personal life of another without consent,” according to findlaw.com.
If in the course of your advertising, you print, publish, or promote private information about another company or individual, you would be committing an advertising injury and could face a claim or lawsuit.
Four categories fall under an invasion of privacy:
- Appropriation of name or likeness
- Intrusion on a person’s seclusion
- Unreasonable publicity of someone’s private life
- Publicity that unreasonably damages another person in the public eye
Protecting your company
The good news here is that there are policies you can put in place to protect your company from advertising injury claims. One of the easiest places to make these types of mistakes is in social media posts. Here are some suggestions that can serve as a guide:
- Keep your business page separate from personal pages (and don’t mix the two).
- Never make false statements about a person or company.
- Never use copyrighted images, photos, logos, or words that don’t belong to your company.
- Never post or use private, privileged, or confidential information about another person or company.
- Never use false advertising.
- Monitor social media activity on the company page and employees’ pages.
What if you get sued over an advertising injury?
Lawsuits over advertising injuries are unfortunately common, particularly if you operate in a competitive industry. A competitor could even sue you just to make trouble for your company. If you ever face a claim or lawsuit, follow these five steps to protect your company.
- Respond to the claim right away.
- Speak with your company’s attorney.
- Discuss the possibility of bringing summary proceedings so the case will be shorter, faster, and simpler.
- Gather and document the facts, counterclaims, and defenses.
- Move forward quickly to keep legal costs down.
Other types of commercial insurance
Aside from general liability (which covers advertising injuries), you may need other types of commercial insurance policies, whether you own a marketing/advertising company, retail store, manufacturing business, IT/cloud service provider, construction company, or eCommerce business.
Commercial insurance policies include:
- Professional liability (aka errors & omissions insurance)
- Property insurance
- Business Owner’s Policy (BOP)
- Cyber liability
- Product liability
- Workers’ compensation
- Business interruption
- Commercial auto
Speak to a licensed insurance provider to discuss the types of policies you need to protect your business. Even the smallest claim can result in financial devastation for your company.
Avante Insurance can help you secure the right commercial insurance to protect your life’s work. Contact us to talk about your business needs and request a quote. We will ensure you have the right coverage to protect the enterprise you’ve worked so hard to grow.
This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.