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The Small-Business Owner's Guide to Advertising Injury

Chapter 7: Social Media Marketing Tips for Small Business: Cut Your Advertising Injury Exposure
Part 4: How General Liability Insurance Protects You from Advertising Injuries

As you may already know, General Liability Insurance is an insurance policy that protects small businesses from common third-party (non-employee) lawsuits. Covered disputes typically include property damage, bodily injury, and — you guessed it — advertising injury lawsuits. Let's take a closer look at this coverage.

How Does General Liability Insurance Work?

Like all insurance policies, General Liability Insurance works by shifting the cost of a covered claim — an advertising injury lawsuit, for example — from your shoulders to an insurance provider's shoulders. When considering General Liability policies, it's important to keep three numbers in mind:

  • Premium. This is the price you pay for your insurance coverage. As long as you pay your premium on time (whether that's once a month or once a year), you'll be able to collect insurance benefits when a covered event arises.
  • Deductible. This is the small amount of money you pay out of pocket toward a covered claim. You won't be able to collect your benefits until you pay your deductible.
  • Policy limit. Every insurance policy has a limit — the maximum amount of money your insurance provider can provide in benefits. General Liability Insurance usually has two limits: a per-occurrence limit (the amount the insurer pays toward any one claim) and an aggregate limit (the amount the insurer pays during the term of your policy, which is usually a year). Most small businesses choose policies with a $1 million per-claim limit and a $2 million per-term limit.

In the event that your business encounters a covered event, you would file a claim. When approved, your insurance provider can help you pay for related expenses, including…

  • Attorney's fees.
  • Mediation expenses.
  • Settlements (i.e., the amount it takes to resolve the issue out of court)
  • Judgments (i.e., the amount of damages a judge / jury orders your business to pay).
  • Other court-related fees (e.g., witness fees, evidence fees, etc.).

As you know, these costs can add up quickly — which is why this type of insurance is so important for small-business owners.

What Types of Advertising Injury Does General Liability Insurance Cover?

Like any insurance policy, General Liability Insurance may come with "exclusions," or incidents that the policy will not cover. The good news is that General Liability Insurance covers most types of advertising injuries, including but not necessarily limited to:

  • Slander and libel.
  • Privacy invasion.
  • Copyright / trade dress infringement.

But it's always important to go over your policy with your insurance agent to make sure you understand exactly what is and is not covered. Insureon agents would be more than happy to answer any questions you may have — contact us today!

Next: Chapter 8: Beyond Advertising Injury: What's Illegal on Social Media?

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