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Advertising Agency Insurance: What is It and What Should It Cover?

June 07, 2024 | Insurance 101

This article was originally published July 18, 2022

The term advertising agency insurance refers to a set of policies that protect an agency from potentially devastating financial liability and losses. Advertising agencies face many risks—from employee and visitor injuries to property damage and liability for mistakes made. Without proper small business insurance coverage, the consequences of an incident can be crippling or can put an agency out of business entirely.

Ad agent presenting an idea

The Many Types of Agency Liability

When you think about the kind of work an advertising agency does, it’s not hard to see many potential areas of agency liability. For instance, if clients visit your location, slip-and-fall accidents and associated injuries can occur. If your business owns vehicles and an employee driving one of them to a meeting or to run business-related errands is at fault in an accident, the agency may be liable.

And because your business provides professional advice and services, there’s the risk of mistakes that create what’s called professional liability. But these are just some of the areas where an advertising agency may be open to lawsuits.

While you don’t want to go to work every day worrying about these kinds of incidents, you also don’t want to ignore them. Fortunately, our licensed insurance experts can help you understand agency liability and the policies that protect you from it.

What are the Specific Types of Advertising Insurance?

In some instances, the term advertising insurance is used to refer to damage that one business causes to another in the course of advertising its offerings. Here, we’re talking about the different types of insurance that an advertising agency may need. They include:

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    Workers’ compensation insurance. This coverage helps protect your agency if an employee is injured, contracts an illness, or dies as a result of an incident on the job. It’s typically required for companies that have employees, and it can pay medical costs, legal fees, and lost wages due to the injury.
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    Errors and omissions (E&O) insurance. Also known as advertising professional liability coverage or media professional liability insurance, this policy could protect you from the cost of damages and legal fees when someone claims your professional service caused financial harm to them or their business. Coverage includes mistakes on the part of your business (errors) and the failure to perform a service (omissions). An example would be that you make a mistake in an advertisement you create and distribute for your client.
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    General liability insurance. This type of insurance covers damages and legal costs associated with injury claims made by customers and other people who don’t work for you, medical costs associated with these incidents, and damage to other people’s property caused by your business. It also covers slander, libel, and copyright infringement. So, if a client slips on a wet floor in your office and breaks their wrist, for example, that incident may be covered.
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    Business owners policy (BOP). Also called property & liability insurance, this insurance combines general liability insurance with coverage for company-owned property. That includes protection for the building you own, space you lease, and any property needed to run your business. The policy also provides coverage for things like business interruption, and can replace lost income and cover costs associated with getting your business back up and running after suffering property damage. So, if a storm destroys part of your office roof and you have to operate from another location, you may be covered.
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    Commercial auto insurance.This type of insurance can protect company-owned vehicles and also shield the company from liability associated with their use. That includes covering legal fees and the medical costs of others if your employee is at fault in an accident. If your agency leases a vehicle, for instance, and an employee is at fault in an accident, your policy may protect you. It can even cover the cost of damages if the vehicle is used for personal activities outside of its primary business use.
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    Umbrella insurance. Umbrella insurance provides an added layer of financial protection It’s designed to cover costs that exceed the limit of another liability policy—subject to its own limit. Without it, you may be responsible for costs that are over what your policy will cover.
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    Cyber insurance. This insurance can be purchased as an add-on to a BOP, general liability, or professional liability policy. It helps cover costs related to system hacks or data security breaches in which sensitive information like client credit card data is stolen and fraud has occurred or it’s reasonable to believe that it might occur.

With policies in place to cover the different types of risk your advertising agency faces, you can focus on your work and not on those risks.

What Kinds of Advertising Professionals Need Advertising Insurance?

While we’re using the term “advertising” here, virtually any type of organization that does work to promote other businesses can benefit from advertising insurance. That means that marketing firms, advertising consultants, digital media creative agencies, and other similar companies should consider small business insurance.

Advertising Agency Insurance: Easier to Purchase Than You You Might Think

It would be understandable if you believe that getting advertising agency insurance is a time-consuming and expensive endeavor. It certainly used to be!

Today with biBERK, however, you can get a free online quote, read through it, make a decision, and purchase your insurance policies all in a matter of minutes. And if you have questions as you consider your options, our licensed insurance experts are happy to assist you.

Plus, because we sell directly to you without middlemen or brokers, you can enjoy savings of up to 20% over other small business insurance providers. There’s really no reason not to properly protect your advertising agency from unexpected financial burdens!