Overview of the Media and Advertising industry
This is a huge category that includes some of the largest and fastest growing companies in the world. They all focus on communication. How are we disseminating information? How are we spreading our message, whether it’s news, product advertisement or simply our weekend plans? Media and advertising companies are finding solutions for improving communication and connectedness in new and constantly changing ways.
Publishers include Disney, Comcast, News Corp, Advance Publications and iHeart Media, to name a few. Advertising agencies also host a diverse group including WPP, Omnicom, Publicis, Interpublic and Dentsu. Once we look to the world of digital media, however, it becomes much more crowded at the top.
Google and Facebook fit into each of these categories in one way or another. They represent both the future of media and the biggest challenge to the industry’s new entrants. Whether it’s digital advertising, adtech or social media, these companies have figured out how to maximize the value of an advertising dollar. As a result, the advertising industry is shaping itself around them.
Some of the biggest risks Media and Advertising companies face
Why is Insurance for Media and Advertising Companies Important?
The larger scale companies operate with a higher degree of risk but everyone in the media and advertising spaces takes on risk. The most obvious would be what the insurance industry appropriately calls “media liability.” This is a type of professional liability coverage that protects companies from suits claiming their content defamed or infringed on the intellectual property of a third party.
Advertising liability coverage works in a similar way but protects the company from liability related to their own advertising. Together, media and advertising liability coverages provide a more comprehensive safeguard against liability that arises from media operations.
Unique exposures exist for each type of company under the “media and advertising” umbrella. A news company would want to have a policy that provides protection when the government tries to compel them to reveal a confidential source or when they have to defend their first amendment rights. The insurance industry has reacted to that and created bespoke policies.
The right tech and media professional liability would protect a company from, for instance, liability from a bug in their system causing an erroneous order being placed on their client’s behalf for ad space.
On the technical front, service outages can come from all directions. Anything from routine system maintenance to targeted DDoS or cyber extortion attacks can trigger a business interruption. If an advertiser can’t do their job or a social media network has to shut down, they’ll have to pay the price in the form of lost income or, worse, lawsuits.
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What Insurance do Media and Advertising companies need?
Cyber Insurance
What it covers:
This protects your organization from lawsuits, fines and penalties arising out of a hacking attack or data breach. It can also reimburse the company for its direct expenses such as breach notification costs, credit monitoring, data restoration and forensic analysis.
Why you need it?:
If you collect any sort of personal or organizational information, have a “login” feature on your site, integrate with another organization’s systems in any way, have employees who could fall for a phishing scam, generate online content such as blog posts or even simply rely heavily on email communications, you need cyber liability insurance. SaaS companies are highly visible targets for hackers and, as such, should be protected.
Intellectual Property Insurance
What it covers:
Protects the company and its intellectual property. Policies can work two ways: 1. Defense policies provide legal defense costs if you are sued for an IP infringement 2. Abatement policies help cover the cost of enforcing your own IP rights
Why you need it?:
IP litigation is common and expensive. Companies in innovative, disruptive and/or competitive spaces may face suits from both competitors and patent trolls. For the latter, just having this policy in-force can act as a deterrent. In the case of competitors who may have a more valid claim, the policy provides much needed capital so that the company’s balance sheet doesn’t have to take the hit. (Not to mention the benefit of partnering with an experienced claims team who can guide you through the process).
Directors & Officers Insurance
What it covers:
Protects the company and key individuals from liability related to the management of the organization. Companies that indemnify their executives against certain covered claims can turn to their D&O policy for reimbursement. In addition, if the organization itself is named in a suit, the policy would defend the entity.
Why you need it?:
Ensures the company and its leadership is protected from legal liability related to allegations of breach of fiduciary duty and other management-related claims. It provides the capital required to absorb certain legal costs without mortgaging the future of the entire organization.
Media Liability / Professional Liability Insurance (E&O)Professional Liability Insurance (E&O)
What it covers:
Covers the company if an act, error, or omission committed in the course of the company’s performance of media or advertising services is alleged to have caused a financial loss for a third party.
Why you need it?:
Complex litigation is expensive and there’s a lot that can go wrong for tech-enabled media and advertising companies. The policy responds to the threat of professional service disputes by paying legal fees and judgements/settlements from a lawsuit for an alleged failure in their services. Coverage is also provided for allegations of defamation or plagiarism involving the company’s content.
Workers Compensation & Employers Liability
What it covers:
Provides a legally required coverage protecting employees if they are physically injured or get sick while on the job. Legal requirements vary state-by-state so be sure to research the laws in each state where you have employees located.
Why you need it?:
Fines could be imposed on any company that doesn’t comply with their state’s workers comp laws. Employers liability coverage also provides valuable legal defense costs if a lawsuit develops in connection with the injury or illness outside of what standard Workers Compensation covers.
Property Insurance
What it covers:
Building coverage protects properties that are owned, while business personal property coverage reimburses for covered damage to the contents of a building. Lost income and extra expenses caused by a covered loss can also be addressed by business interruption coverage.
Why you need it?:
Any company with a physical presence runs the risk of their physical property being damaged or destroyed. If you hold large amounts of inventory or own equipment you’ll often have a lot at stake. On top of that, renting temporary office space after a fire is a surprise cost that no business needs to be caught off guard by.
Employment Practices Liability Insurance
What it covers:
Protects the organization and its management by paying the costs of defending against certain suits from employees or investigations from government agencies. Common claims include allegations of harassment, discrimination, retaliation, and wrongful termination.
Why you need it?:
If you or the organization itself is named in such a claim, the coverage would defend you and pay the judgment or settlement against you. Keep in mind how easy it is for an employee to start an action that requires a legal defense.
General Liability Insurance
What it covers:
Covers the organization from some of the fundamental risks that come with running an SaaS organization, such as ‘slip and fall’ claims, damage to a third party’s property, products liability claims, damage to rented space, and personal or advertising injury claims.
Why you need it?:
It forms the foundation of any risk management program. On top of protecting the company from legal liability caused by bodily injury or property damage, this coverage is usually required in contracts like office leases and vendor agreements.
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Types of Media and Advertising Companies that need insurance
Digital advertisers / Adtech platforms
The new wave of advertisers. These companies specialize in search engine marketing, online advertising, web design and development and ecommerce consulting. More “adtech” heavy companies focus on backend systems that help direct advertisements to a specific audience. Programmatic advertising has emerged as one of the most efficient methods of turning dollars into clicks.
Social Media
Whether it’s Facebook, Instagram, Twitter, Snapchat or any successor to these platforms, this group of companies connects people. They will also allow for targeted advertising driven by information gathered from target group profiles.
Publishers
These are the content generators. They also provide the platform where the ads will be shown to be consumed by general public. Websites, magazines, newspapers, tv and music publishers are all included here.
Agencies
These companies are generally what you think of when you think “advertiser”. They will often conceive and oversee large campaigns that blend both traditional media (printed designs like posters, flyers, stickers, banners, etc.) with digital advertisements. This class focuses both on the creative side and marketing strategies.
Media and Advertising companies we work with
