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Professional Indemnity Insurance For Advertising Agencies

Advertising agencies have a great deal of responsibilities in today's market. Some of their primary duties involve developing sales campaigns, implementing publicity strategies, creating branding, complying with legal requirements and (perhaps most importantly) recommending a product or service to a relevant demographic. So, it is beginning to become abundantly clear why such firms require legal and financial protection. This will often come in the form of professional indemnity insurance. What are some of the primary reasons that such a form of insurance is necessary and which benefits prove to be the most relevant within this competitive sector?

Legal Concerns

Firstly, it should be appreciated that modern advertising agencies have the ability to reach millions of consumers across a nation or even around the world. As a rule of thumb, consumers will opt for certain products or services partially based upon the suggestions and campaigns of these companies. Should a wrong recommendation be made or the product in question is discovered to be faulty (or even dangerous), lengthy and devastating litigation can occur as the end result. Professional indemnity insurance will mitigate the risks of such a situation whilst lessening the overall impact on the agency in question.

Numerous Variables to Consider

Unlike other sectors, advertising firms need to take into account a number of potentially risky situations. Some of the most common can include (but may not be limited to):

Providing the wrong advice.
Infringing upon an existing copyright.
The incorrect execution of a marketing campaign.
A breach of contract.

All of these situations will naturally pose grave consequences to the agency. This is particularly the case if such a company has tapped into multiple markets. Should third-party damages be incurred, the legal processes can be lengthy. Furthermore, the ultimate costs to the business can prove crippling. It should also be recognised that most advertising firms will now need to prove that they are equipped with professional indemnity insurance before ever securing a contract. This is for the protection of the agency as well as their client base.

So, it is now quite clear to appreciate the need for this form of insurance. As such agencies can be exposed to a great deal of risk (and outcomes may not always be predictable), professional indemnity insurance is essential for the safe and successful completion of any project.

Advertising - what is the worst that can happen?

Burger King Makes a Royal Mess

This burger-flipping chain is American in origin, one of the most diverse countries in the world. You might expect that would give them some cultural sensitivity, yet a 2009 advertising campaign in Europe proved otherwise.

The unimaginative stereotypes caused uproar in Spain. It focused on a Texan with his "little Mexican"; a masked wrestler. Perhaps the firm thought Spain would be far enough away from the stereotypes to miss the obvious cultural problems but this was not the case.

Many people called out the racist tropes and the ad campaign was dropped.

Nike Shows Foreshadowing for Oscar Pistorius

By now we"ve all heard about the infamous Oscar Pistorius murder trial. The Paralympic runner caught everyone's attention during the 2012 Olympics. It was not surprising when Nike, purveyor of sportswear and shoes, picked him for a new ad campaign.

The unfortunate quote on one poster was "I am the bullet in the chamber". Not long after, Mr. Pistorius may have taken the advice to heart when he allegedly shot and killed his girlfriend.

Perhaps that was not the best choice of slogans after all.

Lesson Learnt: Change Your Password.

Social media can be a minefield for the most tech-savvy of companies. However, it is not too much to expect the social media department of advertising companies to change the password of their accounts once in a while.

It seems Burger King (who appear to be ad-blundering royalty) missed this memo. Imagine the horror of the social media manager logging in one morning and finding that the account has been plastered with images and slogans from your biggest rival.

Yes, Macdonalds logos filled the Burger King twitter account as hackers enjoyed themselves. Macdonalds has denied any involvement and it took the team hours to wrestle the account back from the saboteurs.

A Guerrilla Advertising Campaign Bombs

In one of the more expensive blunders on this list, Cartoon Network decided to covertly cover a city in LED symbols. Since the design was unfamiliar to many (which presumably was the reason for the ad itself), the meaning was lost.

Instead of enjoying the mini light show people began to call the emergency services. They believed the LED signs to be bombs. Experts had to be called in to remove them at high cost and even higher embarrassment.

It ended up costing Cartoon Network two million dollars in compensation for the city's services.

HMV Mistreats its Social Media Intern. Big Mistake.

Amid some truly terrible economic circumstances, HMV found not only its bank account in trouble during 2012. After one disgruntled employee was laid off, he or she took out the understandable ire on the official HMV twitter account.

Though the employee managed to keep the profanity and offence to a minimum, he or she announced that the account was created by an unpaid and "technically illegal" intern, and that HMV was laying off the very people who could save the brand.

HMV is still struggling years later, so perhaps they should have kept on the people with such coherent passion.

Pepsi Accidentally Touts Ancestral Zombies

In one of the most notorious cases of not checking the local culture, Pepsi is said to have rolled out a new advertising campaign in China during the 60s and 70s that flopped dramatically. The reason? Their "Come Alive!" slogan carried the connotations of coming back from the dead for those in the country.

It has to be said that Pepsi have never confirmed this story, and as it predates common use of the Internet there are no jazzy screenshots of the blunder. However, they have never denied it either, and it has remained a useful urban myth reminding you to check your translation skills.

Snapple Fail To Understand The Concept of Summer

The American brand Snapple decided that the best way to advertise its new range of ice-lollies was to put a huge version of one up in the middle of New York. This in itself is not the worst idea a marketing company has had. After all New York is known for its bitter winters and the ice-lolly could be quite the attraction.

Instead, Snapple put up the lolly in the middle of summer on a day of impressive heat. The lorry bringing the ice spilled sticky melted ice-lolly all over the pavement and a huge clear-up ensued. In the excitement of erecting a huge gimmick, Snapple failed to remember how physics works.

Congratulations, Your Ad Is Sexist

In the 1980s people were beginning to notice a large amount of sexism and prejudice in advertising. An enthusiastic few decided to make the most of it and draw attention to the worst of the bunch in the hopes of changing the cultural feeling towards it. One such group was a review board in Quebec, Canada, that "awards" groups for their sexist adverts.

The first "award" was granted to a Sony and La Place advert which showed a scantily-clad woman in proximity to stereos. Since there was no link between the product and the gratuitous soft-core porn, it was deemed unnecessary and sexist.

This was shortly followed by a Mr. Clean advertisement where a dutiful young girl cleaned up after her scruffy young slob of a brother; not the best of common stereotypes!

The worst cigarette advertisement ever?

Strand cigarettes were heavily promoted in the 50s with hugh TV ad coverage of an obviously sad and lonely man, wondering along on his own until he stops, lights a cigarette, and finally smiles whilst a narrator in the background states "you"re never alone with a Strand!". Absolutely brilliant. The only problem is that no-one in their right mind wants to be seen as sad and lonely and the brand tanked. Oddly enough a vaguely similar ad by Hamlet Cigars was a great success and ran in various forms for years. The difference? They made it humourous, and we all like a good laugh. Watch them all if you have the time, they"re hilarious!

Moral. There's obviously more to advertising than meets the eye!

Prudent Plus Ltd is an introducer appointed representative of Seopa Ltd, of Blackstaff Studios, 8-10 Amelia Street, Belfast, BT2 7GS which is Authorised and Regulated by the Financial Conduct Authority number 313860. These facts can be checked by visiting the FCA website.

We do not give financial advice on this website. If in doubt get professional advice and always read the policy information before purchasing an insurance contract.