Social Media Influencers Must Weigh Liability Insurance Options

As social media influencers increasingly promote brands, their actions can expose companies to a wide array of liabilities, such as copyright infringement, competitor disparagement, false advertising, and infringement of rights of publicity. This has led many brands to require social media influencers who promote their products to purchase liability insurance.

Inexperienced influencers should be wary of common policy exclusions that limit the protections they believe they purchased. And brands that engage such influencers should review their own coverage programs to guard against the risks created by this less formal method of interacting with potential customers.

General liability coverage protects the influencer from claims they caused bodily injury or damaged property if an unexpected accident takes place while staging an Instagram shot or filming a TikTok video. General liability insurers even pay for an attorney to defend against such claims. But social media influencers and companies may be more interested in lesser known “personal and advertising injury” coverage found in general liability policies.

Personal and advertising injury coverage protects against several potential claims that may arise out of social media posts, including violation of another person’s right to privacy; disparagement of products, goods, or services; infringement of copyright, trade dress, or slogan in an advertisement; and use of another’s advertising idea. For example, the now-bankrupt energy drink maker Bang Energy was held liable for copyright infringement in a lawsuit filed by Sony Music Entertainment because its influencers had used over 200 recordings in paid social media posts.

Influencer posts often don’t go through the same rights clearance process as traditional advertisements, and protection against inadvertently disparaging a product or infringing on a copyright or advertising idea could be invaluable. But even this coverage has limits.

Intentional false statements and violations of rights are excluded from such coverage. Also, general liability policies frequently exclude claims from a policyholder who works in advertising, broadcasting, publishing, or telecasting or is an internet content provider. While companies that engage social influencers may be protected under such coverage, the influencers themselves might be excluded.

Courts haven’t yet addressed whether this exclusion targeting traditional media and internet businesses applies to the activities of social media influencers. A cautious influencer should try to have this exclusion deleted from the policy.

The influencer can find further protection in other commonly available insurance coverages. Media liability coverage protects companies that create traditional advertising content and covers many of the “personal and advertising” risks noted above, as well as broader protections against copyright infringement claims. But this coverage often can be expensive, and the potential costs of defending against a lawsuit may need to be considered when deciding the limit of insurance to purchase.

More insurance options are available. A professional liability policy could be tailored to fit the services provided by an influencer and the risks they face. Cyber liability coverage can protect against both malicious hacking and misuse of social media accounts and the costs of recovering a hijacked account.

Anyone embarking on a career as an influencer would be wise to discuss their options with an experienced broker to create an effective risk management strategy.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Andrew Lustigman is a co-managing partner at Olshan Frome Wolosky. He is chair of the firm’s advertising, marketing, and promotions group and co-chair of the brand management and protection group.

Jeremy King is a partner at Olshan Frome Wolosky. He concentrates his practice on insurance coverage actions and other civil litigation matters.

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