False advertising insurance coverage

If you’re facing a lawsuit over false or misleading statements in your ads, personal and advertising injuries coverage, which is a component of a general liability insurance policy, would help with the legal costs.

Personal and advertising injuries are acts that violate the rights of a person or a business, including:

• Libel
• Slander
• False advertising
• Copyright infringement
• Invasion of privacy
• Misappropriation of advertising ideas

Misrepresenting your products or services is another form of advertising injury, so there’s a good chance your general liability insurance would help cover litigation fees and potential settlements.

Keep in mind that some general liability insurance policies may have exclusions, including intentional misrepresentation. If you’re creating ads that purposely contain false information, your insurance company may not cover a claim. You should always take time to review your policy to understand the specific advertising injury coverage it provides.

Although people often use the terms “misrepresentation” and “false advertising” interchangeably, they’re not the same. False advertising is just one bite of a bigger apple that’s known as misrepresentation in advertising.

False advertising is when an ad makes a direct, untrue statement, such as:

• Exaggerated or unverified claims
• Misleading or bait-and-switch pricing
• Defamation of a competitor’s product
• Fake positive customer reviews
• Misrepresenting a product’s origin

Misrepresentation is when an ad either has false claims, withholds key information, or sets unrealistic expectations through wording or imagery. This could look like:

• Misleading product imagery
• Exaggerated product demos
• Omitting negative information
• Hiding disclaimers

If a wellness brand posted social media ads claiming that customers would lose 20 pounds in the first month of taking their new supplement, without any verified scientific proof to back up that claim, that would be false advertising.

But if those ads also showed before-and-after photos of a person who’d lost 20 pounds after taking the supplements and having weight-loss surgery, and they didn’t disclose those details, that would be misrepresentation. Either option could result in an expensive and lengthy class action suit.

Even if the accusations are unfounded, a false advertising lawsuit can be expensive, stressful, and time-consuming. General liability coverage will help pay your legal fees, court costs, and any settlements or judgments.

In addition to false advertising claims, your general liability insurance policy will also provide coverage for:

• Third-party bodily injury
• Third-party property damage
• Product liability

If you own a publishing company, advertising agency, or other type of media business, it’s important to know that advertising injuries are often excluded from your general liability insurance.

Purchasing media liability insurance, which is a type of professional liability insurance (also known as errors and omissions (E&O) insurance), will cover claims for:

• Advertising injuries, including libel and slander
• Copyright infringement and intellectual property (IP) infringement
• Work mistakes and oversights
• Missed deadlines
• Invasion of privacy

Want to explore affordable general liability policies and other insurance products for your small business? Apply for free insurance quotes today from top-rated providers across the U.S.

Our insurance agents are here to answer any questions you might have about policy options. Once you pick your policy, you can typically receive coverage and a certificate of insurance (COI) within 24 hours.