When you’re looking at insurance for your business, there are many risks you should be aware of. Most people know that general liability covers bodily injury and property damage incidents, but it also covers personal and advertising injury.
Personal and advertising injury refers to injuries your business causes that may affect the personal or business reputation of another party. Claims of personal or advertising injury may concern:
- False arrest
- Malicious prosecution
- Invasion of privacy
- Wrongful eviction
- Copyright infringement
- Libel and slander
- Using another person or company’s advertising idea
For example, say your newly hired vice president comes up with an advertising idea. Once the advert is launched, the vice president’s previous employer accuses your company of stealing the idea. In this case, your general liability insurance policy will provide coverage for legal fees such as court fees and hiring a lawyer.
What Does Personal and Advertising Injury Insurance Not Cover?
There are certain exclusions when it comes to this coverage. This coverage is unique in that it does cover intentional acts, so long as the intention is not to cause harm. Going back to our earlier example, the vice president and company fully intended to use the advertising idea. They did not intend, however, to commit copyright infringement or steal from the opposing company. If you or your company knowingly breaches one of these offenses, your policy will not provide coverage. Other instances that are not covered include:
- Knowingly publishing false information
- Libel and slander published before the policy was active
- Criminal acts
- Contract or agreement violations
- Claims concerning the quality or performance of goods, products or services
- Publishing incorrect prices
- Copyright, patent or trade secret infringement unrelated to advertisement
- Using another’s name or product without permission
Your policy may be subject to additional exclusions. Make sure to go over your policy with an insurance agent to understand when you will be covered and when you won’t. The last thing you want is to be blindsided with legal expenses because a claim you thought was covered isn’t.
Enhancing Your General Liability Insurance Policy
You can add to your general liability policy in order to have more coverage for personal and advertising injury claims. An umbrella liability insurance policy can be added to cover the gaps left by your other liability insurance policies. For example, if your general liability policy covers $1 million but you are sued for $1.5 million, an umbrella liability policy will cover the remaining $500,000. This policy can extend to other liability coverages for your business, as well, including:
- Professional Liability: Professional liability, also known as errors and omissions insurance (E&O insurance), covers claims related to professional negligence. This negligence typically results in injury or monetary loss for a client. Professional liability is different than general liability, as general liability covers acts of non-professional negligence as opposed to professional negligence.
- Commercial Auto Liability: Commercial auto insurance covers vehicles used or owned by a business. Liability insurance for vehicles includes bodily injury and property damage.
- Directors and Officers Insurance: Directors and Officers insurance (D&O insurance) protects your board of directors from claims concerning their activities on the board.
- Product Liability Insurance: Product liability insurance covers claims related to products produced or sold by the company.
How Much is Personal and Advertising Injury Coverage?
The cost of general liability insurance depends on a variety of factors such as the business’ size, industry, deductible, policy coverage limits and location. On average, business owners may pay between $435 to $921 a year for general liability insurance, including personal and advertising injury coverage.
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