Advertising Injury and Personal Injury Gap

Are your commercial clients properly insured for Advertising Injury/Personal Injury (AI/PI)? Or do they have a gap? In today’s litigious environment, lack of proper coverage can be costly especially when it comes to media exposures such as defamation, false light, copyright, and trademark.

Typically some AI/PI coverage is included in the ISO CGL policy form. Most carriers use this form, so carriers are competing based on price and service instead of coverage for this type of policy.

In cases where there is an above average amount of exposure to AI/PI, standard carriers may exclude that coverage, at which point you will have to look elsewhere for coverage. If your client carries professional liability coverage, you may consider looking to it to help close the gap. Some carriers can do this and some cannot or will not. Some professional liability policies go beyond even their standard AI/PI coverage and attempt to pick up some of the exposures that are normally assumed by the GL.

When deciding how to handle your client’s exposure to AI/PI , you may want to consider some of the following differences in policies in order to put the best coverage for the right price together for your Insured.

  • Review the definitions for AI/PI carefully, if you are not dealing with an ISO form, as they can all be worded differently.

 

  • Although many policies have similar exclusionary language some policies have severability of insured language where the typical ISO CGL does not. This language protects those parties that were not involved in the wrongful act.

 

  • Under some policy forms the exclusionary language “intentionally false, fraudulent, deceptive, misleading or misrepresentative advertising or sales activities by or known by you” is not as restrictive due to the addition of the word “intentionally.” Some policies do not include the word “intentionally.” Without the word intentionally, the exclusion is much broader as the false, misleading or misrepresentative act does not have to be intentional to be excluded. Without the word “intentional,” the exclusion may apply to a claim even though the act was accidental or unintentional. This really takes a great deal of coverage away when this one simple word is left out.

 

  • Check the AI/PI coverage language under the professional liability policy to see if it applies to professional services only or if it also extends to business operations. If it does not apply to business operations, then, for example, if your client is sued for defamation arising from a negative comment about a supplier or a competitor, the policy may not respond.

Remember for your agency’s own E&O exposure that professional liability policies generally are not the same. There is no ISO standard for a professional liability policy. Therefore, selling just price when dealing with professional liability policies, may not be the best way to perform the services that your client is looking to you to provide.