Advertising Agency Insurance
Having the right policy can protect your business against lawsuit costs, cyber risks, and more.
Written by
Christine Lacagnina has written thousands of insurance-based articles for TrustedChoice.com by authoring consumable, understandable content.
Reviewed by
Jeff Green has held a variety of sales and management roles at life insurance companies, Wall street firms, and distribution organizations over his 40-year career. He was previously Finra 7,24,66 registered and held life insurance licenses in multiple states. He is a graduate of Stony Brook University.
Advertising agencies engage in challenging and creative work and have a tremendous responsibility to their clients. If your efforts fail or you make a mistake in your work, your client’s investment in your services may become a source of contention, leading to possible lawsuits. Without the right coverage in place for your business, the potentially hefty financial loss could be devastating.
Fortunately, an independent insurance agent can help your business get equipped with the right advertising agency insurance policy. They'll get you matched to the coverage built for the job. But until then, here's a closer look at advertising agency insurance.
Common Liability Risks to Consider for Advertising Agencies
If a client trusts your business and you make an error or fail to provide services as promised, a lawsuit could be a likely result. Advertising agency owners have to protect their business assets, reputation, and client relationships. It's critical to have coverage in case any of the following claims get made against your business:
- Defamation of character
- Slander and libel
- Copyright infringement
- Emotional distress
- Negligent failure to deliver agreed-upon products or services
- Errors or omissions that lead to financial loss
- Professional negligence
These are just some common claims customers and members of the public can make against an advertising agency. Consider these possible scenarios:
- A word gets omitted from an advertisement, and the error leads to some type of financial loss for the client.
- A campaign fails to deliver results as promised (e.g., increased sales).
- An employee fails to obtain reproduction rights for a photo used in a client campaign, and the client gets sued for copyright infringement.
- A competitor accuses your client of slander or libel because of an advertisement you created.
A special type of liability protection is critical for advertising agencies. Professional liability insurance protects your business if you get sued for professional negligence. It guards your business against potentially devastating costs associated with lawsuits if your business makes a professional error or omission that causes harm to a third party. A professional liability policy pays for your legal defense costs, including attorney fees, court fees, and any settlements or judgments you must pay.
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What Kind of Business Insurance Do Advertising Agencies Need?
Insurance for advertising agencies is essentially a special type of business insurance tailored to meet the unique needs of the industry. Advertising agencies are subject to numerous property and liability risks that need to be addressed with advertising agency insurance. Unforeseen events can threaten your business's livelihood if you don't have the right insurance for your advertising agency to protect against potential disasters like:
- Client slips and falls
- Weather events (e.g., wind, hail, etc.)
- Fire and smoke damage
- Theft and vandalism
- Employee injuries
- Damage to a client’s property
Working closely with an independent insurance agent, you can determine exactly what risks you have and find the right advertising agency insurance to address them.
Property coverage considerations for advertising agencies
If you have a small to medium-sized agency, you may be able to bundle your basic property and liability coverage together in a package designed for small business owners. A business owners policy provides comprehensive, affordable coverage, including:
- Commercial property insurance: This covers a business's buildings and their contents, such as computers, office equipment, and furniture.
- Business interruption insurance: This compensates for lost business income and pays for operating expenses and continued employee wages if you must temporarily close following a covered loss like a fire.
- Commercial general liability insurance: This pays for claims of bodily injury and personal property damage to third parties.
An independent insurance agent can help you get set up with all the coverage you need to properly protect your business's property.
Additional Insurance Considerations for Advertising Agencies
You might also want to consider endorsements to your business owners policy or standalone policies. Some common insurance additions to consider are:
- Cyber liability insurance: This provides coverage in the event of a data breach at your business and helps pay for the cost of notifying affected clients as well as the costs of repairing public relations or conducting investigations.
- Commercial auto insurance: This covers disasters involving your company vehicles, including lawsuits after an accident or repairs or replacements for damaged or stolen vehicles. If your employees drive personal vehicles for business purposes, you must have hired or non-owner auto liability coverage to protect your company from accident-related costs.
- Commercial umbrella insurance: This increases the limit of liability coverage you have under an existing policy, including commercial general liability insurance and commercial auto insurance. Business umbrella coverage increases your liability limits in increments of $1 million.
- Workers’ compensation insurance: This pays for lost income and medical expenses for employees that get injured or ill due to the job environment or duties.
Your independent insurance agent can help you finish off your advertising agency insurance policy with all the coverages necessary.
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Our independent agents shop around to find you the best coverage.
Why Work with an Independent Insurance Agent?
While most advertising agencies perform many of the same services, every business is unique. You need tailored advertising agency insurance that addresses the specific risks you face and that can help you protect your business from financial harm.
An independent insurance agent works with multiple insurance companies, including those that specialize in insurance for ad agencies. Your agent can work closely with you to find the right mix of coverage for your needs and budget and remain your trusted adviser for the long term.