Company insurance is intended to safeguard the financial assets of a business owner and is a necessary investment for an advertising agency.
This article will discuss the primary insurance coverage for ad agencies, general liability insurance, as well as additional products that are appropriate for this industry.
Ad Agencies Need General Liability Insurance
Every firm, regardless of sector, has risks that should be insured. General liability insurance is the most frequent and comprehensive form of coverage that company owners purchase.
General liability insurance covers the following risks:
Physical harm
Damage to property
Medical expenses
Legal defence and decision
Personal and commercial harm
While general liability insurance is not legally needed for companies, operating without it is exceedingly dangerous. If your company is sued, you might face costs in the hundreds of thousands of dollars (or more). The only way to avoid this sort of catastrophe from destroying your organisation is to have an adequate general liability insurance coverage in place to assist pay for these losses.
COMMON SITUATIONS FOR WHICH GENERAL LIABILITY INSURANCE MAY PROVIDE COVERAGE FOR A AD AGENCY
Example 1: A prospective customer arrives at your office to discuss an ad campaign. He stumbles and falls while heading up the stairs to the entryway, shattering his wrist. He requests that you pay for his medical care, alleging that your actions are dangerous. This is most likely covered by your general liability insurance coverage.
Example 2: One of your rivals has given you a letter alleging that your advertising agency has slandered their company. You are reasonably convinced that the action has no validity, but you also recognise that you must retain legal counsel to defend your company. Your general liability insurance coverage will pay for the expense of employing an attorney as well as the settlement if one is required.
Example 3: A member of your advertising firm is late for work. She rushes into the workplace and misses seeing a customer. She throws the customer to the ground, breaking his arm. He chooses to sue your company for monetary damages. Your general liability insurance coverage will cover the expense of your legal defence as well as the cost of a settlement if one is required.
Of course, this is not an entire list of risks covered by a general liability insurance policy, and certain situations may result in a specific peril not being covered. To minimise coverage gaps, it’s always better to speak with your agent about the terms of your policy.
General Liability Insurance Cost
Ad agencies in the United States typically pay between $450 and $750 per year for $1 million in general liability coverage.
The cost of your coverage will be determined by a number of variables. Among them are your:
Location
Deductible
Employees’ number
Per-occurrence restriction
The overall aggregate limit
You may be able to get general liability insurance at a lower cost if you buy it as part of a business owner’s policy (BOP) rather than as a separate policy. A business interruption policy (BOP) is a more complete option that covers numerous types of coverage, such as business interruption and property insurance.
Other Types of Coverage Required by Advertising Agencies
While general liability insurance is the most crucial, there are various different types of coverage to be aware of. Other forms of insurance that every advertising businesses should have are as follows:
Insurance for Workers’ Compensation
Workers’ compensation insurance protects workers financially if they are harmed while performing their obligations. If an employee gets injured on the job, they may seek medical attention via workers’ compensation. They may also get assistance with lost pay if they need to take time off work to recuperate. Most states require firms to have workers’ compensation insurance.
Insurance for Professional Liability
A professional liability insurance coverage can assist to safeguard your company against accusations of negligence resulting from mistakes or failure to perform. If a customer sues your company for faults you committed or mistakes they say you made, your insurance will cover your legal bills. It will also cover the expense of a settlement if one is necessary to settle the action.
Coverage Options for Advertising Agencies
In addition to the insurance listed above, your ad agency may need other forms of coverage based on particular parts of your activities. Some of them may not apply to you, so be sure to ask your agent whether policies are appropriate for your company.
Umbrella Insurance for Businesses
The general liability insurance policy you hold will cover your firm in many instances, but the limitations of your policy may be exceeded—for example, if you lose a significant case. If your general liability insurance expires, you will be forced to pay the remaining losses out of your own money. If you have a business umbrella coverage, it will pay excess losses when the limitations of your general liability policy are surpassed.
Insurance for Commercial Property
All of the equipment and materials you’ve purchased to operate your company would be expensive to replace if they were damaged or destroyed, such as if a fire destroyed your office. If your property is destroyed by a covered occurrence, a business property insurance policy will offer financial protection.
Additional Security Measures for Your Company
Although investing in company insurance is simple (and necessary), it should not be your first line of defence. Yes, insurance will reimburse your company for cash losses incurred as a result of an occurrence, but it is much preferable to avoid losses altogether.
With this in mind, here are a few steps you can take to better secure your company:
Make use of legally binding contracts and other business agreements. (We provide free templates for several of the most often used legal forms.)
To safeguard your personal assets, form a limited liability company (LLC) or a corporation. (To discover how to incorporate an LLC or company in your state, see our step-by-step tutorials.)
Keep your company licences up to date.
Streamline the internal procedures of your company. This will eliminate unneeded variables from routine activities and establish a secure, consistent environment in which to do business.
If your company is an LLC, you should check into LLC insurance.