Understanding Liability Coverage B: Protecting your business from reputation and advertising risks

If you own a business, chances are you have a Commercial General Liability (CGL) policy. It’s designed to protect you from common risks, like injuries or property damage.¹ Did you know it also covers certain reputation and advertising issues? That’s where Coverage B comes in.

The three main coverages include:

• Coverage A: Third-party bodily injury and property damage claims
• Coverage B: Personal and advertising injury
• Coverage C: No-fault medical coverage¹

What does Coverage B cover?

Coverage B often flies under the radar, but it can save your business from costly lawsuits tied to your words, ads or marketing.^2,3 Here’s what it covers:

• Defamation (libel and slander): If someone claims your business damaged their reputation through something you said or wrote.
• False arrest, detention, or imprisonment: If your business is accused of wrongfully holding someone.
• Malicious prosecution: if someone says you started a lawsuit against them without cause.
• Wrongful eviction, entry, or invasion of privacy:
• Intellectual property
  • Advertising issues: Using someone else’s slogan, design or idea (intellectual property) without permission.^2,3
  • Infringement of copyright, trade dress, or slogan: Unauthorized use of protected works – copying a design, slogan or branding of another product or service.^2,3,4

What you can do to minimize your risk

Mitigating claims under CGL Coverage B involves several proactive strategies:

• Understand your policy: Understand what Coverage B includes and what it does not include.^1,4
• Review complaints early: When faced with a claim, review the entire complaint carefully. Look beyond the labels and names of counts to identify any allegations that may trigger Coverage B, such as defamation or disparagement.^2,3
• Be accurate in ads: Avoid exaggerations or negative comments about competitors.³
• Document everything: Keep detailed records of all communications and marketing materials. They can help if you face a claim.³
• Get expert help: Consult with legal professionals who specialize in insurance and intellectual property law. They can help interpret your policy and advise on the best course of action to mitigate potential claims.^2,3
• Train your team: Implement a robust risk management strategy that includes regular reviews of marketing practices. Make sure employees know the rules for advertising and communication.

Coverage B may not be top of mind, but it can protect your business from unexpected legal headaches. A little preparation, like reviewing your ads and knowing your policy, goes a long way.^1,2

References