Media Liability Insurance:
What is media liability insurance?
Media liability insurance is a type of errors and omissions insurance for businesses in the media sector. If your business creates content for viewers, then there is a high chance of third-party liability claims. The claims could be defamation or other intentional torts. Moreover, such claims can result in financial setbacks or reputational harm.
Although risk management may not work all the time, media insurance can protect you from any losses that you may incur. For businesses working in the media sector, media insurance policy provides broad range of protection against liability claims. Some common media liability claims are as follows:
- Plagiarism: Use of someone’s else work as your own without an authority can result in a lawsuit. UNC has stated that you can be punished even if you unintentionally copied another’s work, for being “reckless.” Although the work is not cited as copyright, a person or an entity can show evidence to allege your business for plagiarism. Therefore, plagiarism is one of the common media liability claims.
- Defamation: Your company can be legally liable for publishing a false statement against a third party, unknowingly or knowingly. In case you verbally mention the statement which is not true, it falls under libel. Similarly, a written false statement is categorized as slander. For example, Netflix series “When They See Us,” was sued because of defamation claim as reported by CNN. The series was based on the true story, but portrayal of one of the characters was false and defamatory.
- Invasion of privacy: As a media publisher or broadcaster, your business might have to capture the stories of other people’s lives. Statista stated that 40 percent of online users showed concern about misuse of their online data. For instance, your business can face a lawsuit if it intrudes into any people’s personal life or uses sensitive data without justification or consent.
- Copyright and trademark infringement: Your business can be alleged for reproducing or distributing copyrighted work. In particular, if you translate someone else’s book into a movie, without authorization, your business will be severely penalized. Hence, copyright infringement and trademark infringement can also lead to financial damage to your business.
- Disparagement: Disparagement involves mentioning false statement about properties, business, or products that leads to reputational harm. Moreover, similar to defamation, disparagement also leads to legal claims.
- Missing deadlines: Projects delays or missed deadlines have a significant impact on your clients. Hence, they can drag you to court for your inability to perform tasks in the set time.
Who needs media liability insurance?
- Magazines, newspaper, and book publishers
- Periodicals or trade journals
- Radio stations
- Advertising agencies
- Public relations and communication
- Video and film production companies
- Television stations
- Post-production services
- Content-focused websites
What does media liability insurance cover?
Your clients may accuse you of not meeting the deadline or the set standard. The legal defense and settlement costs for such claims can be massive. Whether you are a content creator or advertisement creator, it is highly recommended that you have a media insurance policy.
Policyholders can get the following coverages:
- Legal defense cost: The cost of defending claims can be massive, leading to financial loss. Media liability policy covers the expenses of the legal defense of an insured party. Furthermore, some policies may incur investigation costs as a part of legal defense expenses.
- Claim settlement cost: Media liability claims can be settled outside the court, in case of a compromise agreement. Nevertheless, the claim settlement cost can still be substantial. However, with media liability insurance, your financial burden can be as lower as zero. It depends on the deductibles and limits of the policy.
- Attorney’s fees: Legal case such as defamation invasion, invasion to privacy can take months or even years to settle. Along with time, your business fund is also on stake. Whether you settle the claim in the court or outside the court, you have to pay to an attorney.
Media liability inusrance policy also covers for infringement of intellectual property and breach of advertising regulations. Furthermore, the policy can also indemnify for punitive damages.
Common endorsements for media liability insurance
The insurance requirement may vary as per the need of your business. Thus, the media liability coverage that a publisher buys may not fit-in the production business.
You can add following coverage to your media liability insurance.
1. Electronic data processing insurance
Media companies require the support of advanced technology to produce and distribute the work. Media liability insurance may not provide sufficient protection for such devices. So, consider electronic data processing insurance that includes coverage for:
- Equipment: includes laptops, monitors, terminals
- Media: consists of loss of devices due to damage or theft
- Data: involves data recovery costs and loss of business income as a result of data loss.
Some insurance policies you might want to consider are as follows:
a. Business owners policy (BOP)
Media liability insurance only covers claims alleged for intentional torts. So, adding business owners policy to your specific policy adds value. It includes:
- General liability insurance: It protects against claims as a result of third-party bodily injury or property damage.
- Commercial property insurance: It covers the loss incurred because of property damage caused due to fire, explosions, or unfavorable weather conditions.
b. Cyber liability insurance
Media businesses may have access to sensitive information of their clients or employees. The breach of confidential data can lead to legal claims. IBM states that a data breach can cost USD 3.92 million on average as of 2019 report. However, cyber liability insurance can protect your business against such claims. It typically includes:
- Crisis management and credit monitoring costs
- Investigation and notification costs
- Business income
- Regulatory fines or penalties
- Data privacy and network security liability
What policies do cyber liability insurance not cover?
The policies not covered under media liability insurance are as follows:
- Bodily injury and property damage: Media liability insurance does not cover for the breakdown of property or any casualty.
- Breach of contract: You may sign the confidential contract with your clients. Your business can suffer financial loss as a result of breach of such contract. But media liability insurance will not provide any coverage.
- Patent infringement: If your business uses, distributes, or sells patented products or ideas, media liability coverage may not pay for the legal claims. For example, if your publication company publishes content of other person without any authorization, media liability insurance policy will not redeem your legal expenses.
- Employment practices liability insurance: Although you are a media liability insurance policyholder, it excludes coverage for wrongful termination or discrimination cases. You need to add employment practices liability insurance to protect your business from the legal claims filed by employees accordingly.
- Criminal acts: It excludes the claims related to illegal or unlawful acts. But media liability policy may defend against criminal claims until you are found guilty.
- Controversial content: Some insurers may exclude claims related to adult content, gambling content, or gossip content.
- Claims made by regulatory authorities: If the created content is against the law, then a media liability policy may not cover the cost of the lawsuit.
Types of insurance that require media liability insurance policy
What factors determine the cost of media liability insurance?
Like any other insurance, the cost of media liability insurance also depends upon the type of coverage plan you choose. The premium rate can vary, depending on several factors as follows:
- Industry: Risk relies on the nature of work you perform. The risk exposure of newspaper publication can be different from that of other industries.
- Coverage limits: Each policy has its limit to cover the loss. Nonetheless, you can increase your limits as per the need. If you want extra coverage, you may have to pay higher premium.
- Claims history: You can expect a higher premium if you have already made a media liability claim.
- Types of public relation exposure: Your premium may exceed if you are inclined to more public exposure. For example, the premium for news publisher or broadcaster is higher than for advertising companies.
- Number of clients: The cost or premium is directly proportional to the number of clients. In other words, more clients your business has, more will be the premium rate.
Frequently Asked Questions
Does my business need media liability insurance?
If your business deals with producing content for the viewers, you need to consider buying media liability insurance. Industries such as an advertising agency, film and program producer, book and magazine publishers, or brand manager should opt for media liability insurance to protect their business from lawsuits.
Is media liability insurance a claim-made policy or occurrence policy?
- Claims-made policy- It provides coverage only if both the claim and the incident occur during the policy period.
- Occurrence policy- It covers the claim even after the policy expires, but the incident should occur during the policy period.
Does media liability insurance cover independent contractors?
Yes, it can provide coverages to the independent contractor on the insured’s behalf. So, consider reviewing the individual policy to determine how the term “insured” is defined.