Did your daily news fix this morning involve turning the pages of an actual newspaper? Or did you just tap a few headlines on your smartphone while you drank your cup of coffee?
As digital media continues to expand platforms for traditional publishers like newspapers and magazines, the publishers liability insurance market faces new challenges.
“Traditional publishing in a paper sense has almost gone by the wayside,” says Jason McDonald, senior underwriter – management and professional liability insurance at Philadelphia Insurance Companies. “Very few operations nowadays are just print operations. Everybody’s scrambling to find different revenue streams and ways to attract readers and subscribers.”
That means whether or not you have a publishers liability book of business, plenty of your commercial clients could have a media exposure that hasn’t occurred to them—or you. “Agents need to view a client’s exposure from a holistic perspective,” McDonald cautions. “Make sure you’re really addressing all their needs and accommodations. Just because they’re not a traditional media publisher doesn’t mean they don’t have publishing exposure.”
More Ground to Cover
There’s no question that the publishers liability market is broadening, says Joanne Richardson, managing director, U.S. media at Hiscox.
“If you’re primarily a publisher or a broadcaster, you’re forced to buy a media liability policy because you’ve got strong enough exclusions in your general liability,” Richardson explains. “But there are those grey areas today in the business where people don’t necessarily believe themselves to be publishers, but because of the way they’re using digital distribution, they’re starting to look and feel more like a publisher.”
As an avenue that “pushes more interaction, involvement and engagement from readers,” social media is the perfect example of what McDonald calls a “nontraditional media exposure.”
“All sorts of organizations advertise their services and programs, and they all operate social media pages,” McDonald explains. “Everybody’s got it in some capacity, whether they’re using it themselves, asking their employees to engage in it or asking their clients to engage in it.”
Imagine that a consumer visits a company’s Facebook page and notices content that represents a person or company they know in a negative light. Or maybe they stumble upon false advertising, or a marketing campaign that uses a piece of music or video clip that belongs to a third party. “The company could find themselves liable for personal injury or infringement-type claims, based on trademark and other pieces of intellectual property,” McDonald points out.
In fact, McDonald argues that the average organization’s media exposure is even more inescapable than its cyber exposure: “As more and more companies shift toward this technology dynamic and everything’s digitalized in an online platform, the media exposure is equally pervasive if not more impactful.”
On that note, McDonald also notices more blending between cyber and media claims. Richardson agrees that while media liability forms are fairly mature, most publishers now need to purchase cyber and data privacy coverage as well.
“When you look at a traditional publisher, they really had very limited capabilities of tracking and gathering personal data on individuals,” Richardson explains. “The digital age has certainly changed that. Because of the way they’re distributing content and the information they’re taking from people, they now have a significant privacy exposure they didn’t have before.”
Data breaches continue to happen every day, making cyber liability insurance “a boardroom issue,” Richardson says. “There’s a heightened attention to it at all companies. We’re seeing a market shift in media companies looking to buy data privacy and cyber coverage, either for the first time to enhance and increase their coverage limits at renewal.”
Beyond cyber, digital publishing presents a slew of new coverage issues for media companies to consider.
For example, “internet downloads are common, and people assume the content is free and available simply because it was posted online,” says Diane McNally, senior underwriting manager – OneBeacon Entertainment. “We are seeing customers simply failing to secure appropriate clearance of protected materials.”
That’s actually copyright infringement—and it “continues to be expensive to defend,” McNally points out. “It’s important for agents to make sure their customers have the correct trademark clearance procedures in place.”
For commercial clients that aren’t classic publishers but do have a media exposure, should you recommend blended forms or a standalone publishers liability policy? It depends.
“Sometimes they need to go with a standalone media policy; sometimes they can get enhancements through their existing professional policies, or other areas where they can get a little bit of media coverage,” Richardson says. “If you’re a technology company, those policies are getting broad enough to cover some media coverage as well. Most of the forms are now getting blended and broadened to cover not only media, but technology and cyber and professional exposures all under one blended policy form.”
But while it may be cheaper to blend media coverage into another form, “other claims may erode the limit and leave little to defend a media claim,” McNally points out. “Copyright and trademark claims are very expensive. You want to ensure your customers have appropriate limits of liability available when they need them.”
And if your client traditionally relied on their commercial general liability policy to be a catch-all for advertising injury or personal injury-related exposures, they probably don’t have adequate protection for issues like defamation and libel, McDonald cautions. PHLY has noticed “a huge influx” of fresh faces in the media market as more businesses and organizations “start to seek out specialized policy forms to address those gaps in coverage.”
“While there is some coverage on those CGL policies, the coverage that is afforded is very limited, and a lot of it does not apply to industries that operate primarily in the advertising space or online,” McDonald explains. “As we see more of these more nontraditional risks progress toward media-related exposures and operations, they’re finding less and less coverage under that CGL policy.”
Jacquelyn Connelly is IA senior editor.