How the public relations industry and insurance connect:
As a public relations professional, you likely service clients, have employees and operate out of a physical office space – all of which leave you open to exposures.
Public relations pros juggle many daily tasks, from pitching reporters to checking in with clients and writing blog posts. One thing you shouldn’t be worried about? Insurance. We’ll help you understand the ins and outs of what you may need.
Read on to understand what coverage you need as a public relations professional.
What businesses in the public relations industry need insurance?
All public relations businesses should be insured – no matter the size. PR businesses that should purchase insurance plans include:
- Independent Consultants, Sole Proprietors and Freelancers
- Boutique and Small Agencies
- Mid-size Agencies
- Large Agencies
What kind of insurance do you need in public relations?
The specific types of insurance you’ll need will depend on the size of your business, and how you operate. Take a look at some of the most common forms of insurance in the industry to see what you should consider for your public relations business.
General Liability Insurance
General Liability Insurance protects your business from a variety of claims, including property damage and bodily injury. General Liability Insurance is often considered a basic essential for small businesses, as it protects you from third-party damage claims. In fact, it can be combined with a Business Owner’s Policy (BOP) for cost savings.
However, not every small business needs a BOP. For example, if you are an independent public relations consultant, you may not have a physical business property or need to worry about employees. In this case, you would only need General Liability Insurance.
When should you get a General Liability Insurance plan? Immediately. By operating a business, you’re already exposing yourself to risks. A General Liability Insurance plan should be one of the first things you look into when setting up your business.
For example… If you’re meeting with a client and spill coffee on their laptop, you’re legally liable for causing the damage (and potentially for loss of documents and data, too). A General Liability Insurance policy would cover this claim, up to the policy’s limit.
Workers Compensation Insurance
Accidents can happen at work – even in the public relations industry. Workers Compensation Insurance is available to provide coverage for medical costs, lost wages, and things like physical therapy and rehabilitation for injuries and illnesses that are work-related.
In addition to protecting your employees, it also protects your business: employees who receive Workers Compensation payments relinquish their right to sue their employer for negligence.
When should you get a Workers Compensation Insurance plan? As soon as you hire employees. In fact, Workers Compensation Insurance is mandatory in many states. Be sure to check your local laws to find out if you need to offer it.
For example… Repetitive stress injuries are common in public relations, where professionals work long hours at the computer. The most common RSI is carpal tunnel syndrome.
Business Owners Policy
A Business Owners Policy, also known as a BOP, combines protection for all major property and liability risks in one convenient package, offering an easy way to cover your business’s physical and financial assets. The typical BOP includes property insurance, liability insurance, and business interruption insurance, with add-ons specific to your industry and risks available.
When should you get a Business Owners Policy? Do you operate your public relations business out of a physical office space? Do clients ever come to visit you in person? Do you own expensive equipment, like laptops and smartphones? If you answered yes to any of the above, you likely need a BOP.
Not all businesses are eligible for a BOP, but most small and mid-size public relations agencies will be. If you have less than 100 employees and $5 million in sales, you’re likely to be eligible. You should obtain a BOP right away, as it’s simply the easiest and most affordable way to get covered.
For example… A fire occurs in your office building, and you have to vacate the space temporarily. However, clients are still expecting work to get done, meaning you’ll need to relocate to a temporary office space in another building. With business interruption insurance from a BOP, you’re covered in this instance.
Errors and Omissions Insurance
Client relations is a major part of what public relations professionals do daily, and even the most experienced PR pros can make the occasional mistake when advising a client. Unfortunately, whether intentional or not, errors can leave you exposed to a lawsuit. If an unhappy client perceives a loss that your company is responsible for, they could sue you.
If you don’t have Errors and Omissions, or E&O, you could wind up facing thousands of dollars in legal costs – or even bankruptcy. If you offer public relations consultation to paying clients, this is one policy you’ll want to purchase.
When should you get an Errors and Omissions Insurance plan? Right away, if clients are paying for your services. Protect your business from clients who might feel that the service they received failed to deliver the results you promised in your business pitch. It doesn’t matter if you or your employees don’t make a mistake: if the client believes you caused them a loss, they can bring suit and the legal costs alone can add up quickly.
E&O Insurance can often be combined with a BOP, an option to consider if you’re eligible.
For example… You recently began working with a new client who is paying a hefty retainer fee in exchange for your public relations services. They’re launching a new product that you think is exciting and pressworthy – and you tell them so. You convince them to invest in an influencer relations campaign to drive awareness of the new product… and the campaigns results in practically no sales or traffic to their website. As a PR pro you know that media results are never guaranteed, but the client, who has spent quite a bit on this campaign, is furious. They could sue you for damages, but if you have E&O insurance, you’re covered.
Other Insurance Types to Consider
- Cyber Liability Insurance: as a PR professional, you likely operate much of your business in the digital world. If your business is the victim of a hack, you’ll likely be required to notify anyone who could have been affected, including past and present clients, that their data may have been compromised. This type of insurance will help you pay for the costs of recovering from such an attack, contacting clients and rebuilding your reputation through advertising.
- Umbrella Insurance: this is an additional type of insurance to consider depending on the size and scope of your PR business. It will cover you if other forms of insurance you’ve purchased do not cover certain liability risks, and will provide additional protection if you’ve reached your maximum coverage limits.
- Commercial Auto Insurance: if you or your employees are frequently out of the office attending desk-side appointments with reporters, dropping off packages of press samples at the post office or meeting with clients, you’ll want to obtain commercial auto insurance if any of it is happening in a company-owned car.
How much does Public Relations Insurance cost?
The cost of insurance for a public relations business depends on a variety of factors. Your premiums will vary based on where your business is located, whether or not you handle expensive product samples, the size of your business and whether or not it has employees.
To get an accurate quote for the insurance types you are interested in, contact us for further assistance. Once we provide a quote, we encourage you to review the policies to ensure everything you need is covered by the plan.
What type of insurance does this industry need?
- This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.
- This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to a mistake or error made in a professional capacity. Your business may have contracts with clients or partners that require Professional Liability coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, Professional Liability coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.
- This policy protects the business's physical assets and is appropriate whether you own or lease your space. Keep in mind that this policy will only offer protection in the case of covered events. If you need protection for certain scenarios, such as floods or earthquakes, you may need additional coverage. If you have a mortgage or a lease, you may be required to have property insurance. Even if you are not, this is the best way to protect the building you are in and the business property you have in case of a natural disaster or some other accident.
- This policy, common in the professional services industry, helps to protect your business if a client believes they've suffered a loss due to an error or omission on your part. Your business may have contracts with clients or partners that require E&O coverage, provide a "warranty or guarantee," or have clauses that require you to "indemnify or hold harmless" your clients. If so, E&O coverage is often recommended. This coverage is also commonly recommended for any businesses providing advice related to legal or financial matters.
- Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.
- This insurance protects the business in the case of any incidents involving a vehicle that has been hired by the company to be used for business-related purposes. It also provides coverage in the case your business uses other vehicles which are not property of the business, such as having delivery drivers use their own vehicles. If your company hires vehicles or allows employees to use their own vehicles for business purposes, you will want to consider this insurance.