Media Liability Insurance protects media companies against lawsuits related to failures in professional services, and personal and advertising injury.
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For companies in the media industry, including broadcasters and podcasters, offline and online publishers, content and video creators, and those providing professional services, advice, or recommendations, lawsuits related to your work may be more commonplace now than ever. With the digitization of media, the widespread reach of the Internet, and the speed with which information can travel, a small mistake or error can, in short order, lead to a big problem for your clients. If customers feel they have been personally injured or have suffered financial losses as a result of your professional work, they may seek damages and file suit against your business. To protect against these types of risk, many media companies seek out the coverage provided by Media Liability Insurance.
What is Media Liability Insurance?
Media Liability Insurance protects media companies from the costs of lawsuits and damages related to their professional services. Media Liability Insurance is a type of professional liability insurance specifically designed for media businesses, protecting against lawsuits related to failures in professional services, in addition to covering personal and advertising injury.
You may be familiar with personal and advertising injury coverage, as it is often included in general liability insurance. However, because their work is public, companies in fields like advertising, publishing, news, or web design are more at risk for personal and advertising injury lawsuits. Therefore, most insurance companies exclude these companies from the personal and advertising injury coverage provided in commercial general liability policies, resulting in the need for coverage via Media Liability Insurance.
Lawsuits that revolve around libel, slander, copyright infringement, or invasion of privacy can cost you and your business millions of dollars. Media Liability Insurance can provide you the financial backing to weather these lawsuits, covering your legal fees, as well as any money you are ordered to pay in a settlement. Media Liability Insurance will also protect you against lawsuits alleging any failures in your professional services, including poor performance, errors or omissions, and negligence.
- You own a TV news studio in Texas. One of your reporters discovers that a major oil company is in violation of federal safety laws. You air a three-part series on the oil company’s shoddy practices. The day after the second installment, you receive a call from the oil company’s legal department—they are suing you for $10 million on the claim of libel.
- You run a web design company, and your client has hired you to build a new website for the upcoming launch of their latest consumer drone. When the launch date comes, errors in the backend code of the website result in hundreds of customers unable to place their orders for the new drone. Your client must hire another firm to fix your company’s mistakes and loses out on tens of thousands of dollars in lost revenue. They sue your business for damages.
What businesses need Media Liability Insurance?
In the course of doing business, there is inherent risk in the professional services and work your company provides. For media companies in particular, when you are creating content that is being consumed by the public, any mistake or failure on your part can lead to embarrassing and costly consequences for your clients.
If a third party files suit against your firm for plagiarism, copyright infringement, libel, or slander, the financial consequences could be devastating. If your client is unhappy with your work, they could also sue you, putting the financial viability of your business at risk. No matter how careful and meticulous you are in your work, mistakes do happen. And even if you’ve done nothing wrong, clients can still sue you for perceived negligence. For most companies, lawsuits will prove to be financially challenging, and for those smaller media companies, this may be a risk that you’ll be unable to recover from.
Businesses that may benefit from Media Liability Insurance include:
- Advertising firms
- Broadcasting companies
- Content creators
- Content marketers
- Graphic designers
- Internet media sites
- Internet service providers
- Internet search engine companies
- Marketing firms
- News media companies
- PR firms
- Publishing companies
- TV or movie production companies
- Web design firms
- Web development businesses
What does Media Liability Insurance cover?
Media Liability Insurance covers claims arising from your professional services, advice, or work. Your insurance policy will cover legal costs, attorney fees, court costs, and any settlements or judgments against your company. While the exact coverage may vary from insurer to insurer, the following types of claims are typically covered:
Errors or omissions in your professional work. A dissatisfied client can sue your business if they feel a mistake that you’ve made has led to their financial loss.
- Example: Your advertising agency is launching a new campaign for a client that manufactures electric scooters. On launch day, your client alerts you to a glaring mistake in the advertisements that you have developed—the price you’ve listed for their latest e-scooter shows as $499, rather than the true retail price of $899. The client receives hundreds of angry messages from customers and has had to mitigate customer complaints by offering steep discounts. The client blames your agency for the error and sues for damages.
Undelivered or uncompleted work. If you fail to deliver on a deadline or agreement, a client may sue you for damages.
- Example: Your video production company is editing and producing a new online show for a popular YouTube star. Due to a series of internal mishaps, your team misses a critical deadline, resulting in delays and loss of advertising revenue for your client. Your client sues your firm for damages.
Actual or alleged negligence. If a client believes that you have failed to use reasonable care in your professional duties—whether this is true or not—they may sue you for negligence.
- Example: You run a boutique PR firm and are hired to represent a new brand of eco-friendly household cleaning products. After you start to get press for your client, many review outlets begin to question the ingredients in the cleaning products, pointing to the fact that the products use triclosan, a controversial cleaning agent. Bad press starts to pile up, and your client is furious. They sue your firm for negligence.
In addition to covering professional liability claims, Media Liability Insurance also covers claims resulting from personal and advertising injury. Covered areas typically include:
Slander, libel, or disparagement. This offense refers to any defamation by speech (slander), defamation in written or visual form (libel), or discrediting of another’s products, goods, or services (disparagement).
- Example: You run a popular news site, and a recent article calls out a local manufacturing plant for violating environmental regulations and polluting a nearby creek. The company that owns the plant claims these allegations are false and argues the media attention has caused losses in its business. They sue your site for libel.
Copyright, trade dress, or slogan infringement. This offense refers to any use of another’s copyright, product or packaging appearance (trade dress), or slogan without permission.
- Example: You run a successful parenting podcast and have recently released a series discussing the impact of helicopter parenting on Gen Z. A large record label has accused you of using music from one of their artists in your intro sequence without permission or license. They sue you for copyright infringement.
Plagiarism or misappropriation of ideas. This offense involves representing someone else’s language, thoughts, ideas, or expressions as your own original work.
- Example: Your technology magazine recently published an exposé on the poor working conditions of factory workers at a major electrical vehicle company. Another media company claims that large parts of the article were lifted from an investigative piece they published last year. They sue your company for plagiarism.
Publications that violate privacy. This offense refers to any oral or written publication that violates a person’s right of privacy. Common privacy violations include: using a person’s likeness or name without permission, intruding into a person’s private affairs, using publicity to put someone in a negative light, or disclosing private information about someone.
- Example: You own an internet news site that covers politics in the Minneapolis area. Rumor has it that a local politician is having an affair with his secretary. You manage to have one of your reporters go undercover as an intern in his office. While undercover, the reporter habitually eavesdrops on his conversations, even going so far as to swipe his cell phone and read his texts. When you publish the story online, you include excerpts from his text messages. He knows that you stole his phone, and sues you for invasion of privacy.
What are the key exclusions to Media Liability Insurance coverage?
Media Liability Insurance policies are often customized to the insured and vary by insurer, so exclusions may differ. Generally, though, the following are considered common exclusions:
- Bodily injury. If your work causes bodily injury to a third party, your Media Liability Insurance policy typically would not provide coverage. Third-party bodily injuries are by and large covered by your commercial general liability policy.
- Property damage. Third-party physical property damage is also covered by commercial general liability insurance and not Media Liability Insurance. Note that data loss and other non-physical damage is not included in CGL policies and could potentially be covered by Media Liability Insurance or a cyber liability policy.
- Malicious, dishonest, intentional, or criminal acts.
What are the limits of Media Liability Insurance coverage?
The limits of your insurance policy are the maximum amount your insurer will pay for damages, settlements, and legal fees. Media Liability Insurance policies are typically written on a claims-made basis, with a per-claim maximum as well as a maximum for each policy year. For example, your policy could have a $1 million per-claim maximum and a $10 million maximum for the policy year.
Unlike most other liability policies that are written on an occurrence basis, Media Liability Insurance policies are claims-made, meaning claims are only covered if the claim is made while the insurance policy is active. This is important to note because in the media industry, a client may not discover an error until long after the work has been completed.
For some Media Liability Insurance policies, insurers enact what’s called “shrinking limits” for defense costs. This means that these costs are included within the limits of insurance, with legal fees being deducted from the amount the insurer will pay for any settlements or judgments. Because of the expensive nature of litigation, particularly when involving public media, it’s worth keeping in mind these potential expenses when deciding on coverage limits.
Does Media Liability Insurance have a deductible?
Media Liability Insurance policies typically include a deductible, though depending on the insurer there may be a zero deductible available for small firms. Generally, the higher the deductible, the lower your insurance premiums will be.
Whether you are a newspaper publisher, PR firm, web designer, or content writer, you can benefit from the protections provided by Media Liability Insurance. Having Media Liability Insurance coverage means that your business and employees are protected in the event of lawsuits related to your professional services or work. A company without this coverage opens itself up to the financial consequences from suits alleging negligence, poor performance, libel, slander, copyright infringement, and more. Clients and businesses take their reputations seriously. Given the high costs that lawsuits of this nature can have, it may be in your best interest to acquire the coverage you need through Media Liability Insurance.