If you're like most small-business owners, social media networking is central to your marketing efforts. After all, social network sites are an inexpensive way to connect with your target audience, solicit feedback about your products or services, promote your business, and show the world what your company values.
Perhaps the best thing about social media marketing is how little effort it takes to yield serious results. According to real estate marketing firm Placester's infographic, "The Small Business Guide to Social Media Mastery," 48 percent of business owners who leverage their presence on Twitter generate more customers, while 57 percent find that using LinkedIn is key to attracting more clients.
While using social media can be a great way to get the word out about your business and generate more sales, there are some risks when you advertise in the virtual land of likes, follows, and shares. For instance, if you "share" copyrighted images that don't belong to you and that you don't have permission to use, the owner could sue you for copyright infringement (a form of advertising injury).
The good news is that you don't have weather an advertising injury lawsuit on your own. In fact, there are small business insurance policies designed expressly to protect your company from the high cost of this kind of litigation. (For a real-world example of an advertising injury lawsuit over a social media post, read the blog post, “How Commercial General Liability Insurance Can Protect You from a $82,630 Tweet.”)
But before we talk about lawsuits, let's learn more about how advertising injury affects your business and the implications it could have when you market through social media sites.
Advertising Injury for Small Business in a Nutshell
"Advertising injury" is a kind of nonphysical personal injury that includes the following offenses:
- Libel (i.e., written defamation).
- Slander (i.e., making a false spoken statement that damages a person or entity's reputation).
- Invasion of privacy (i.e., the intrusion into the personal life of another, without just cause).
- Copyright infringement (i.e., using, distributing, or displaying copyrighted work without the copyright holder's permission).
- Misappropriation of advertising ideas (i.e., copying the manner by which another company advertises its goods or services).
Any one of these offenses could land your business on the wrong side of a liability suit. Let's say, for example, you own a coffee shop and you pen a scathing Yelp review of a competitor's café in an effort to bump your own java sales. If they find out your business was behind the one-star review and defamation of the brand, they could sue you for libel. Even if the case is ultimately dismissed by the court, you'll still be responsible for legal defense fees, which can cost a small fortune.
Advertising Liability Coverage: A Small Business’s Safety Net in Times of Digital Distress
So what's a small-business owner to do when they don't want to get hit with an advertising injury suit? The short answer is to play it safe and carry General Liability Insurance.
Standard General Liability policies include advertising injury coverage, which insures your business when it is sued for libel, slander, copyright infringement, invasion of privacy, and misappropriation of advertising ideas. Depending on your policy limits, your GL benefits can cover the cost of…
- Settlement or judgment fees.
- Legal defense fees.
- Other court costs, such as witness expenses, docket fees, etc.
How Does Advertising Injury Affect Small Business Social Media Marketing?
Let’s face it: online, we’re not always on our A-game. The fast-paced nature of networking sites spurs us to make impulsive posts that seem innocuous in the moment, but could cause serious offense – and mean significant liability for your business.
- What if you repost someone else's image without asking their permission or crediting the image to its owner?
- What if you offhandedly respond to a prospective customer's query about your product by comparing it to your competitor's (much worse) product?
Even your blog's comment section could prove to be a liability since you can be held responsible for any libel or copyright infringement your fans post.
This isn't to say you shouldn't take advantage of the many perks social media has to offer your business. Rather, it's a reminder that how your business acts in the digital world could have unwanted financial consequences in the "real" world.
Bottom line: any small business that uses social media has serious exposure to advertising injury. Securing financial protection against potential advertising injury lawsuits involves managing social media risks and investing in a General Liability Insurance policy.
To learn more about how advertising injury works, check out our eBook Tweet or Twibel: The Small-Business Owner's Guide to Advertising Injury.
This post is the first in an ongoing series on advertising liability. Stay tuned for more on how your business can make the most of social media while avoiding advertising injury liabilities!