Overview
The media and advertising category is massive, including some of the largest and fastest growing companies in the world — all focusing 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.
Why is Insurance for Media and Advertising Companies Important?
The larger-scale companies operate with a higher 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 similarly 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.
Contingent Business Interruption
What happens if the supplier’s data centers go down? Contingent business interruption results from an interruption of business at the premises of a customer or supplier. In 2016, data center network outages and contractual obligations caused numerous disputes.
Regulatory Compliance
New regulations and contractual risks are increasing for these organizations with the increase in sharing economy regulations. 57% of companies say that regulatory risk is of great concern, and yet only 23% of those companies believe they are adequately protected against regulatory risk.
Cybersecurity
With the cost of a data breach in the US averaging roughly $4M and cyberattacks increasing daily, cybersecurity is top-of-mind for most company leaders. Media and advertising businesses face unique risks, merely because of the platforms on which they function — unfortunately cybercriminals are relatively savvy on these same platforms.
Intellectual Property
Intellectual property (IP) theft doesn’t often result in a loss for media and advertising companies. Only 6% of survey respondents said they experienced an IP loss in the past few years. But the severity of the loss is potentially enormous when it does happen.
Recommended policies for e-commerce companies
Core Coverage
These coverages form the foundation of any risk management program for media and advertising companies.
General Liability
General liability offers broad protection against some of the most fundamental risks companies face. Known as “slip-and-fall” or “all-risk” insurance, this policy covers personal or property damage and bodily injury occurring on the business premises.
Workers' Compensation
When employees sustain work-related injuries, employers are typically responsible for their medical costs and lost wages. This policy covers these expenses, protecting employees while simultaneously keeping media and advertising companies running smoothly.
Cyber Liability
Cyber insurance protects companies from third-party lawsuits relating to electric activities (i.e., phishing scams). Plus, it offers many recovery benefits, supporting data restoration and reimbursement for income lost and payroll spent.
Employment Practices Liability Insurance
Any company with employees faces the risks of allegations, such as discrimination, wrongful termination, breach of contract, etc. This coverage protects companies against lawsuits related to employment practice
Media and Advertising Specific Coverage
These policies are essential for or can be tailored to the needs of companies operating in the media and advertising space.
Tech Errors & Omissions
Technology drives most company’s success in the modern world. If a tech issue arises, such as a newer software causing a third party’s older system to crash, liability becomes a massive problem. Tech E&O, usually teamed with cyber liability, covers legal fees and other related costs in the event of a lawsuit.
Property Insurance
Whether it’s a devastating fire, natural disaster, or burglary, property insurance responds. This policy reimburses companies for direct property losses, supporting recovery and momentum.
Types of Media and Advertising Companies that need insurance
- Digital Advertisers
- AdTech Platforms
- Social Media
- Publishers
- Agencies
- Creative Boutiques
Media & Advertising Frequently Asked Questions
The cost of insurance for media & advertising companies will depend on several things, including the company’s size and development stage. Other factors include:
- Exposures: risks being insured
- Company practices: views on safety, compliance, and risk management
- Program structure: the amount of deductible and willingness for a company to assume more risk
- Claims history: the type and amount of past claims against the company
