All the world’s a stage, and all the businesses are “media” players. Today, almost every single company creates, produces, and/or markets content to clients. Whether they do so through traditional means like advertisements, articles, videos, photographs, and broadcasts, or they use newer avenues like social media, podcasts, and other web-based platforms, all companies that engage in any marketing and communication have media liability exposures.
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Media liability insurance provides coverage against allegations of disparagement, libel, slander and copyright infringement as a result of errors, omissions and negligence in the gathering, creating and communication of an insured’s material. While traditional media companies in sectors like advertising, marketing, publishing and broadcasting may be equipped to understand and mitigate media liability risks, non-traditional firms (almost all other businesses) must also pay close attention to potential exposures like copyright infringement, defamation, and advertising injury.
Typically, companies carry media liability exposures in three key areas, according to Jennifer Schultz, Senior Underwriter, Specialty Lines, CNA. They’re exposed via their operations, their products, and their promotions.
Even seemingly innocent actions can lead to costly media liability lawsuits. For example, if an insured uses a photograph taken in front of a famous sports stadium for a print advertisement, that sports team could sue the insured for brand appropriation, especially if the advertisement creates the impression that the team is endorsing a particular product or message. Other common examples include trademark infringement claims if one company’s branding is too similar to another’s, false or misleading advertising, and plagiarism allegations tied to articles and blog posts.
With increasing online communication and dependence on social media interaction, many companies face new media exposures that can damage their brand. Schultz explained: “Today, we’re a global, small town. What I mean by that is, a statement can spread around the world with the same speed but with as little effort as if you were in your local coffee shop. It’s amplified word of mouth.
“Beyond how fast word travels is the growing number of available avenues for communication. It wasn’t that long ago when people expressed their opinions publicly through a letter to an editor. It might have been read by a small number of people, and everyone moved on. But today, there are websites, social media platforms, blogs, podcasts - all of these available avenues can be areas of opportunity, but also of risk.”
One way for companies to transfer their media risk is to purchase insurance. There are multiple ways for businesses (both traditional and non-traditional media companies) to access media liability insurance coverage. Traditionally, most companies have secured coverage via their commercial general liability (CGL) policies, which cover claims arising from certain intentional torts under personal and advertising injury liability coverage. In recent years, many non-traditional companies have opted to purchase media liability alongside their cyber liability policies or via modular insurance policies like CNA’s newly released Epack 3 for cyber, media, technology and professional liability.
Companies can also mitigate their exposures to media liability through strong risk management practices. With social media, for example, they should determine and implement a social media policy that defines acceptable usage, has appropriate controls in place over messaging and content, and has tried and tested takedown procedures and response mechanisms to deal with allegations.
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As media liability exposures grow, underwriters are looking for companies that have incorporated these risk management best practices. Schultz told Insurance Business: “I always look at an insured’s understanding of their risk. Do they recognize how broad or narrow their media liability exposure is? Do they have reasonable checks and balances in place? These [mitigation measures] don’t have to cost a lot. Having a social media policy and incorporating that policy into regular employee training sessions can go a long way to remind employees of acceptable behaviours.
“We also look at whether companies are transferring risk appropriately. For instance, if they’re using an advertising agency, do their contracts with that agency require the agency to indemnify them? Are they securing evidence of appropriate insurance? These are general risk management techniques that companies out there do for property, casualty, cyber, and all of the other types of insurance - and they can apply that to their media liability exposures as well.”