Do PR Practitioners REALLY need Professional Liability Insurance?
October 3, 2022
When it comes to Public Relations, client satisfaction and the power of word-of-mouth are critical to the success of your business. Unfortunately, public outreach can be unpredictable, and one misstep—or simply falling short of a client’s high expectations—could result in a lawsuit against your firm. As a PR practitioner, your professional experience has taught you that a good reputation takes years to build, and just seconds to destroy if proper precautions aren’t taken. So how can you manage your risks and protect yourself?
That’s where Professional Liability Insurance comes in. You’ve probably heard all the fuss—who needs it, how much it costs, and how you shouldn’t practice without it. But have you ever wondered why? And whether or not you really need it?
In case you need a refresher: Professional Liability Insurance protects you (and your business) from allegations of errors, omissions, or negligence committed within the scope of your profession, like a breach of confidentiality, poor advice, or failure to render services. For PR practitioners, that also includes exposures arising from copyright or trademark infringement or misappropriation of ideas.
Professional Liability Insurance is vital for all working PR practitioners and agencies—and not just because everyone makes mistakes. There are countless practical and not-so-obvious situations when having Professional Liability Insurance on-hand will make or break your business. Read on to find out what they are, and how insurance can help.
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1. You’ll still have to defend a frivolous claim.
No matter how careful you are, we all know that mistakes and accidents happen, especially if you’re juggling multiple projects at the same time. But keep in mind: clients can be unpredictable and aggressive, especially if they are in crisis and blame you for not achieving their desired PR outcome. They can sue as long as they believe there’s been an error, even if you’ve done nothing wrong. Sometimes all it takes is an unrealistic expectation, a minor miscommunication, or even a difference of opinion to trigger a lawsuit.
Even if the claim is groundless, you’ll still have to defend. And defending a lawsuit isn’t just time-consuming—it’s costly. Professional Liability Insurance ensures that there will be adequate funds to protect your assets, so you don’t have to shell out thousands of dollars for legal expenses, administrative fees, court settlements, and more.
2. The smaller the business, the harder the recovery.
Depending on the allegation, a lawsuit can easily bankrupt a smaller PR firm and have a lasting impact on the finances of a larger one. With fewer resources in tow, smaller and newer agencies are particularly vulnerable to the devastating effects of drawn-out litigation and legal fees, even if they end up winning the suit.
Factor in your personal situation and consider the following:
- With your funds tied up in court proceedings and legal fees, will you have enough to pay your firm’s overhead costs and staff salaries?
- Will your company still be able to operate efficiently while you’re busy in court? If your agency is a one-man show—if there’s no one else to run your company or pick up the slack—you might have to temporarily shut down.
- If you have to shut down, will your business survive the lost income?
- Once damages are paid, will you be financially secure enough to get your operations up and running again?
Any of the above scenarios might put your company out of commission indefinitely. But Professional Liability Insurance can help fill the deficit so you’re not straining your financial resources or scrambling to make ends meet.
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3. You might risk losing business.
In the Public Relations industry, building your reputation and gaining the trust of clients is key to ensuring the continued growth of your business. Even though it may not be mandated for all PR practitioners, having a Professional Liability Insurance policy can give you a competitive edge to prospective clients by showing that you’re reliable, reputable, and proactive about risk management.
Larger and more established clients may even require Professional Liability Insurance as a condition of your contract, to ensure that any losses or damages will be covered if a mistake is made.
RELATED: 8 Most Frequently Asked Questions About Professional Liability Insurance
4. Your staff might make mistakes too.
As your PR firm grows, you might bring on additional staff, independent contractors, student interns, or even a business partner. But more staff means more room for error—and more potential for claims.
Luckily, Professional Liability Insurance policies are customizable and can be expanded to provide coverage for anyone employed by your company for an additional fee. Simply contact your broker or provider when you’ve hired someone new and add them on as an additional insured.
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5. You might be sued for past work.
Keep in mind: you can be served YEARS later, long after the project, campaign, or event giving rise to a claim has taken place. But if you don’t have insurance when you get sued—even if you had it when the event that caused the claim occurred—you’ll be out thousands of dollars to afford the damages out-of-pocket.
With a continuous Professional Liability policy in place, you’ll be covered whenever a claim is reported, even if you’re not currently practicing, on leave, or retired.
RELATED: How to File an Insurance Claim in 5 Steps (or Less)
So do you really need Professional Liability Insurance? Absolutely. We know—we sound a little biased. But any professional that provides Public Relations advice or services to clients for a fee is at risk of legal action and should at least consider having it in their back pocket.
With over 15 years of experience serving PR practitioners, you can rely on PROLINK to stay protected in the face of your unique threats. We’ll take the time to listen, understand your business, and align you with a comprehensive plan that suits your professional needs—and your budget.
Program highlights include:
- Coverage for legal expenses, including limitless defence costs;
- No deductible if the claims made against you are frivolous;
- FREE legal advice for professional and employment matters with unlimited calls to the Northbridge Legal Assist helpline at 1-800-786-0656 (9AM to 8PM, Monday to Friday);
- And more!
Plus, as a full-service brokerage, PROLINK has access to solutions for all of your personal and professional needs including: Commercial General Liability (CGL), Cyber, Home & Auto, and Life & Health Insurance. And as a member of CPRS, you could get up to 20% off Home & Auto Insurance through PROLINK’s group insurance program. To learn more, connect with PROLINK today!
Disclaimer: PROLINK’s CPRS Insurance program serves association members nationwide, except in the following provinces and territories: Newfoundland and Labrador, Northwest Territories, Nunavut, and Yukon Territory.
PROLINK’s blog posts are general in nature. They do not take into account your personal objectives or financial situation and are not a substitute for professional advice. The specific terms of your policy will always apply. We bear no responsibility for the accuracy, legality, or timeliness of any external content.