And why every company (from the big shot to the one-man show) needs to be prepared.
You’re not Bill Gates, nor are you at the helm of a Fortune 500 company. In fact, you’re quite happy with the success of your small business. And as a small business owner, you enjoy working closely with your team, building relationships with your customers, and providing high-quality service and/or products.
You also don’t have the same worries as those gigantic, global organizations, including the threat of an advertising injury lawsuit, right? Sadly, no.
Decades ago, most advertising injury claims were made by one national brand suing another for slanderous advertising, but today there’s a whole new playing field and everyone can play—and lose. Businesses as colossal as Apple or as local as the mom-and-pop carpet cleaners around the corner can be sued for advertising injury.
Blame the media
Social media, that is. The immense popularity of social media and online advertising has opened up the playing field for claims of bad behavior, including slander, libel, plagiarism, unauthorized use of copyrights, and more. All of which can be used as the basis of a lawsuit. For companies that are sued, this trend translates into many tens of thousands of dollars in judgments, court costs, and attorney’s fees. Any company, big or small, needs to understand the implications of their online behavior and how to protect themselves and their assets from losses in the event of an advertising injury lawsuit.
Check your behavior
There are great reasons why millions of small, medium and large businesses use social media to advertise and connect with their customers. It’s cheap and it works. Social media offers companies the opportunity to communicate with tons of people, all at the same time and in real time. Got a special going on? Post it on Facebook or send out a Tweet! Have a delicious new entrée at your restaurant or an exciting event coming up? Show it off and spread the word on Instagram and LinkedIn. You get the picture. But you also need to get the whole picture and understand the ways that you could infringe on another’s rights and end up being sued for advertising injury.
Things to consider when posting:
- Anything you post or publish where it can be publicly seen or shared can be the subject of a lawsuit
Pictures, logos, brand names, or any reference to another company or individual can be a target
- Using or sharing comments, photos, or verbiage that doesn’t belong to you or your company can be considered plagiarism or copyright infringement
- Making false statements about an individual or a company is a no-no
- Advertising or posting private, privileged, or confidential information about another person or company could be cause for an invasion of privacy claim
- Having a separate page for your business is highly recommended (don’t mix personal with business)
- Advertise with integrity. False advertising can be claimed by consumers who feel that they were misled
Keep a tight rein on your social media activity
Another important aspect to keep in mind when using social media is that even posts by employees, former employees, or hackers can cause you to be held liable for advertising injury. Of course, it’s not easy to prevent a disgruntled former employee from posting something inappropriate or to stop hackers from posting on your page, but having a social media watchdog on your team who keeps a constant eye on activity can definitely help.
The bottom line is that anything posted on your social media pages belongs to you and/or your company, so keeping a tight rein on all the activity is not only smart, it’s essential. Many companies develop a social media policy that outlines what’s permitted and what’s not, ensuring that all employees know and understand their responsibilities and the implications of not following the policy.
What to do when you’re sued
Unfortunately, even when you follow all of the rules and take necessary precautions, there’s still a risk that someone will take offense or make a claim against you for advertising injury. When it happens, there are some key things that you can do right away. And if you have the right insurance coverage, usually a commercial general liability policy, you will be protected in the event of a settlement or judgment.
The first and probably the most important action is to get your ducks in a row by gathering all of the facts about what was said or posted. Remember that many times claims such as these are easily refuted because they have no merit (no real injury or harm was caused and/or the post was factual) and they are simply an attempts for financial gain or to hurt your company’s reputation. In any case, here’s what you should do right away:
- Respond immediately to the claim
- Outline all of the facts, possible counterclaims, and defenses you have
- Don’t delay any proceedings because the longer it takes, the more expensive it can get
- Speak with your company’s attorney and discuss the possibility of bringing summary proceedings, which basically allow the case to be shorter, simpler, and more prompt
Social media has opened up a whole new world of possibilities — good and bad — for companies of all sizes. And just like everything else, there are risks that every business needs to consider and actively address. If you are faced with an advertising injury lawsuit, take all of these facts into consideration. And get in touch with us right away if you are unsure about your insurance coverage. Your business policy should include protection against advertising injury to ensure that in the event of a lawsuit, you are protected.