Marketing agency insurance: is professional indemnity enough?

What does professional indemnity answer, and what does it leave out?

A client contract asks for professional indemnity because the client fears one thing: your work costing them money. A standard policy answers that claim, a client's financial loss caused by your advice or services.

An agency's work can also start claims from people who are not your client: the photographer whose image ran in a campaign, or the person a post described. On a standard professional indemnity policy, intellectual property is usually excluded and then partly given back by an extension, an extra section added to the policy. Defamation usually comes in by an extension too, often only where you did not mean to defame.

On many standard professional indemnity wordings a claim means a legal proceeding or a demand for money. A letter asking you to take something down is not yet a claim on those wordings. So check whether the policy pays anything towards costs before then, what sets that payment off, and whether the insurer must agree before you spend. Under the media policy we place, a written request for a retraction or correction is a claim from the day it arrives. Our guide to defamation insurance shows which policy answers a defamation letter.

Two other policies include professional indemnity as one section of a wider package. A media liability package is weighted to content claims: intellectual property, defamation and privacy. A technology package goes deeper on cyber. An agency that also publishes, hosts or holds client data usually has its heaviest exposure there: a copyright or trade mark claim, a dispute about something it published, or a client data breach. Our page on professional indemnity insurance explains why we look past the label.

What happens when a client says your campaign cost them money?

That claim is the professional indemnity part of your cover, whether you hold a standard policy or a media package. On the media wording we arrange, it covers an error, something left out, a wrong statement, or work done without reasonable care and skill. It also covers a breach of a client contract you did not intend.

A freelancer's mistake under your name. Your liability for an error by a sub-contractor you engage is covered as standard. A person working for your business as an independent contractor counts as an employee, so they are insured too. Standard professional indemnity policies commonly reach contractors by an extension as well.

A client who stops paying and threatens a claim. A fee section in that media policy can pay you the fees a client holds back while threatening a bigger claim, less your profit, mark-up and tax. It pays once the client confirms in writing that they will not bring the claim if you stop chasing the fee.

Fixing the error first. If a campaign error could lead to a covered claim, the media policy can pay the reasonable cost of putting it right, where the insurer agrees in writing first and the fix costs less than the claim. Your own staff's time, lost profit and goodwill payments are not included.

Which of these does your agency do?

Five things tell you how far professional indemnity will carry your agency:

• You publish. Copy, logos, images, video and posts all carry intellectual property and reputation risk.
• Your contracts reach past a scope of works. Licence deals, endorsement deals and the terms of the platforms you post on put duties on you beyond the work itself.
• You do physical work. Shoots, launches and events put people and equipment where someone can be hurt or property damaged. That is a public liability risk.
• Freelancers deliver work under your name. Designers, writers, videographers and developers you engage. Their mistake can become a claim against you.
• You hold other people's sensitive data. Customer lists, logins and campaign data. A breach of it can bring a claim against you.

One of these on its own can change the cover you need. We look at the work itself, the losses it could cause and what each policy leaves out.

Is your agency closer to media or to technology?

Your agency leans to the technology side when it:

• hosts client websites, apps or online stores;
• holds client data, such as customer lists, order histories or email databases;
• logs in to clients' websites, ad accounts or email platforms as an administrator.

Hosting changes what a mistake costs. If a site you host goes down, your client's staff cannot work and your client cannot trade. The loss grows by the hour and traces back to you. The client suffers that loss and can claim it from you. That is a professional indemnity claim. Cover for restoring your own systems does not answer it. A technology insurance package is built for that agency. It puts professional indemnity for your technology work beside cyber cover, where your schedule, the page listing what you bought, includes those sections. That cyber cover has two halves: your own losses after an attack, and what you owe others. Some IT liability policies we place carry no cyber cover at all, so if you host client sites, check this first.

An agency that builds sites but hosts nothing and holds no client data may need only IT liability insurance: professional indemnity and public and products liability for technology work.

If most of your work is content, and neither of those applies, the media side usually fits. A media package can carry both halves of cyber cover too, where you buy those sections, but its strength is content claims. Media liability insurance sets out what the package covers section by section.

Is there one policy for an agency's professional indemnity, media, cyber and public liability?

Yes, two ways.

A media package already puts cover for the content you publish beside professional indemnity, public liability and cyber, in one contract. A specialist insurer also writes a package built for digital marketing businesses: web design, hosting, software clients use online (SaaS), SEO, digital advertising and brand consulting. One policy holds professional indemnity, media liability, both halves of cyber cover, and public and products liability.

The sections are bought separately, so two agencies can hold a policy with the same name and own different documents. Your schedule decides what you have. Cover also follows the work your schedule describes, including content made by you or for you. If you start hosting sites or reselling software partway through the year, the business has changed from the one the policy was written for. Tell us then, not at renewal.

If a client's ad or campaign gets you into trouble, are you covered?

Not always, and it turns on the policy you hold. On some of the policies we place, exclusions sit right on the work an agency does every day.

An ad said to be misleading. On the media policy, claims that an advertisement, promotion or product description was false or misleading are excluded. For an agency, writing ads is the job, so this exclusion sits on the work itself. Some professional indemnity and technology wordings we place cover an unintentional breach of consumer law. Which side your policy falls on comes down to its wording, and on an agency's policy it is the first exclusion to check.

Audience data gathered without consent. The same policy also excludes claims that you collected, stored or processed someone's personal information without their consent. Search history and browsing habits are named in the exclusion, and nothing gives the cover back. If you run pixels or audience tracking, that exclusion lands on your own campaigns.

Email and SMS campaigns. One cyber insurance policy we place excludes claims under laws on unsolicited email, SMS and calls. Cover comes back only narrowly, where an attacker on your systems caused the messages. That policy also excludes claims that an advertisement or promotion was false or misleading. So on that policy, cyber does not pick up the marketing claim the media policy leaves out.

Who handles a claim if something goes wrong?

If you ever claim on a policy we look after, a specialist claims manager on our team will run the claim with the insurer, and your broker stays involved, so you are not chasing the insurer alone. The insurer decides whether the claim is paid.

Frequently asked questions