There is little uncertainty that advancements in computer technology, the internet, and communication in the digital age has influenced the way small businesses conduct operations in this modern society. This digital environment has prompted a dramatic increase in the use of intellectual property and e-commerce advertising, and along with that an increased personal and advertising injury risk for businesses that use them.
Personal and Advertising Injury
When an injury to a third-party occurs as a result of a business advertising its products and services, it is labeled as a personal and advertising injury. The injury can occur as a result of trademark or copyright infringement, slander, libel, defamation or invasion of privacy. For example, a competitor of your small business complains that an advertisement, act, comment, or practice you or one of your employees made has damaged the competitor’s business. In another personal and advertising injury example, an advertisement you are marketing makes a false claim about your competitor’s products or services.
Personal and Advertising Injury Insurance Coverage
When a competitor has suffered damaged to its business as a result of an advertising injury, the competitor may decide to sue your small business for a specific claim, such as trademark infringement, copyright infringement, defamation, libel, slander, misappropriation of advertising claims, etc. A personal and advertising injury insurance coverage policy is a type of general liability business insurance that will provide protection for this type of claim.
Why Personal and Advertising Injury Insurance Coverage is Needed
If you’re a small business owner who operates a business that regularly advertises its products or services, you are at risk of a personal and advertising injury claim. As the economic value of intellectual property has increased, so have the amount of “personal and advertising injury” claims, and resulting lawsuits relating to intellectual property rights. Because these personal and advertising injury lawsuits over intellectual property involve complicated legal matters, they can cost a small business thousands of dollars to defend.
While many commercial general liability insurance policies and some umbrella polices contain a provision for personal and advertising injury, not all do. That said, it’s a good idea to review your business insurance policy to see whether it contains a provision for personal and advertising injury.