What Is Advertising Injury for Small Businesses?

As a small business owner, you may have heard the term "advertising injury" in relation to business liability insurance. But what exactly does it mean, and why is it important for your business?

Understanding Advertising Injury

Advertising injury is a type of harm that can occur because of your business's advertising activities. This can include things like copyright infringement, defamation, or false advertising. For example, if your business uses a slogan or logo that is like another company's, you could be sued for trademark infringement. Or, if you make false claims about your product or service in your advertising, you could be sued for false advertising. In today's digital age, where businesses are constantly promoting themselves through various channels, the risk of advertising injury is higher than ever.

Coverage Under Business Liability Insurance
Business liability insurance, also known as general liability insurance, is a type of insurance that protects businesses from financial losses due to lawsuits or claims made against them. This can include claims of bodily injury, property damage, and yes, advertising injury. Most business liability insurance policies include coverage for advertising injury, but it's important to review your policy to ensure that this is the case. If not, you may need to purchase additional coverage or a separate advertising injury policy.

Why Your Small Businesses Need Legal Protection
Small businesses can be particularly vulnerable to advertising injury claims because they often don't have the resources or legal expertise to defend themselves against a lawsuit. This can result in significant financial losses and damage to your company reputation. Having legal protection in the form of business liability insurance can provide small businesses with the necessary resources to defend themselves in court. This can include coverage for legal fees, settlements, and judgments.

Types of Advertising Injury

There are several types of advertising injury that small businesses should be aware of:

• Copyright Infringement: Copyright infringement occurs when a business uses someone else's copyrighted material without permission. This can include images, videos, music, or written content. For example: if a small business uses a photo from a stock image website without purchasing the proper license, they could be sued for copyright infringement.
• Trademark Infringement: Trademark infringement occurs when a business uses a name, logo, or slogan that is similar to another company's, causing confusion among consumers. This can also include using a trademarked term in your advertising without permission. For example, if a small business uses a slogan that is similar to a well-known brand's, they could be sued for trademark infringement.
• Defamation: Defamation occurs when a business makes false or damaging statements about another person or business. This can include libel (written statements) or slander (spoken statements). For example, if a small business makes false claims about a competitor's product or service in their advertising, they could be sued for defamation.
• False Advertising: False advertising occurs when a business makes false or misleading claims about their product or service. This can include exaggerating the benefits of a product or making false claims about its effectiveness. For example, if a small business claims that their product can cure a certain illness without any scientific evidence to back it up, they could be sued for false advertising.

Protecting Your Business Against Advertising Injury

As a small business owner, there are several steps you can take to protect your business against advertising injury claims. These include:

• Review Your Advertising Materials: Before publishing any advertising materials, it's important to review them carefully to ensure that they do not infringe on any copyrights or trademarks, and that they do not contain any false or misleading claims.
• Purchase Business Liability Insurance: Business liability insurance can provide crucial legal protection for small businesses. It's important to review your policy and make sure that it includes coverage for advertising injury. 
• Consult with a Legal Professional: If you're unsure about the legality of your advertising materials, it's always best to consult with a legal professional. They can review your materials and provide guidance on how to avoid potential legal issues.

Real-World Examples of Advertising Injury Claims

According to a recent CBS News piece, there were a record number of food litigation lawsuits filed from 2020 to 2023. Another article in Business Insider cites 18 different businesses that were charged with false advertising claims. These stories serve as a reminder for businesses to be careful about the claims they make in their advertising and to ensure any claims you make are backed by truth and evidence.

By taking the necessary precautions and having legal protection in place, small businesses can avoid financial losses and damage to their reputation, allowing them to focus on growing and succeeding in their industry. Talk to an insurance agent today to discuss the coverage options available for your business.