Do You Need PR Insurance?

Think PR insurance is an unnecessary expense? Think again.

As per Cornerstone Insurance, it’s a ‘cornerstone’ of risk management. And, as former Goldman Sachs President and COO Gary Cohn once said, ‘if you don’t invest in risk management, it doesn’t matter what business you’re in, it’s a risky business.’

He’s right. And public relations is no exception.

After all, us PR pros look after reputation, a brand’s ‘most valuable intangible asset’. And as you and I know, all it takes is one tone-deaf tweet to sink a reputation to the point of no return. I’d say that’s high-risk, wouldn’t you?

Moreover, if disaster strikes and your client’s name gets dragged through the mud, you won’t be able to fix it with a bunch of flowers. They’ll want you to pay. And it’ll cost you dearly.

So, unless you’ve got millions in the bank and a penchant for bad publicity, I strongly recommend you invest in public relations insurance.

Types of public relations insurance

Insurance for public relations agencies is a must. But what sort of cover do you need? In this post, we look at the four types of PR insurance you should consider.

To quote NICEIC Insurance, ‘every business faces its own risks and challenges, so there’s no one-size-fits-all insurance solution.’ Couldn’t have put it better myself.

The type and level of insurance you need will depend on the size of your business, the sector you cover, and the nature of the work you do. But there are four types of insurance you’ll need to cover the basics.

Here’s the lowdown.

Employers’ Liability

To quote The Association of British Insurers, ‘employers’ liability insurance covers the cost of compensating employees who are injured at or become ill through work.’

Right. And if you have one or more employees, it’s not a nice to have. It’s a legal requirement.

The good news? It won’t cost you the earth. It’ll set you back around £61 a year per employee, according to NimbleFins Insurance. And it’s worth every penny. After all, accidents can happen anytime, anywhere. In the office. On the road. Or at a busy trade show.

And regardless of how well you get on with your team, if one of them gets injured and it puts them out of action, things could get ugly. And expensive. What’s more, if The Health and Safety Executive (HSE) inspectors come knocking and you can’t prove you’ve got at least £5 million of employers’ liability cover, you could be fined £2,500 for every day you’re without it.

Whether your staff are permanent or casual, paid or unpaid, employer’s liability is one type of insurance you can’t afford to go without.

Public liability

Claims from injured employees isn’t the only risk us PR bods face. We have other stakeholders, such as journalists, suppliers and members of the public. And any one (or more) of them could get hurt as a result of your PR activities. Even a simple competition can have devastating consequences. Isn’t that right, BRMB?

In 2001, the Birmingham-based radio station ran a competition dubbed ‘Coolest Seats in Town’, in which contestants had to sit on -78°C blocks of dry ice for as long as they could to win tickets to a music festival. Wacky, huh? But it didn’t pan out the way they expected. Within 45 minutes, three of the four participants had developed severe frostbite. According to The Guardian, they spent ‘weeks in hospital recovering from skin grafts after losing skin, fat and muscle as a result of burns.’ Ouch.

The fallout

The PR bods didn’t think this campaign through. And they paid the price. I’m talking more than £30,000 in compensation to the injured contestants. And £15,000 to HSE for breaching health and safety laws.

Steep, right? But they got off lightly. It would have been a whole lot more if they didn’t have public liability insurance. And I recommend you get it too. It’ll pay out for injuries and damage claims brought against you by ‘third parties.’ Given that a fracture can attract damages in the region of £45,000, it’s a small price to pay.

Professional indemnity (PI)

Professional indemnity isn’t a legal requirement. But I’d argue that it should be. As it covers the cost of ‘mistakes made when providing professional services.’ And let’s face it, mistakes can happen. An off day, a lapse of concentration, or the pressure of a looming deadline can cause the best of us to slip up in ways we normally wouldn’t. And, as Lyft’s PR agency found out, one small mistake can cost a fortune.

Lyft goes down

In early 2024, the American ridesharing service announced in a press release that its profit margins were projected to rise by 500-basis points, or 5%. The news sent investors into a buying frenzy.

Within 30-minutes of the news going public, shares in the San Francisco-based company surged by a whopping 67%. The problem? An absent-minded PR bod had added an erroneous zero to the figure.

The actual projection was 50-basis points (0.5%). And it got Lyft into a whole heap of trouble. Share prices tumbled. The screw-up made global headlines. And shareholders proceeded to sue Lyft for securities fraud.

Easy mistake to make

That may go down as the most expensive typo in history. But it’s an easy mistake to make. And it’s exactly the sort of thing that public indemnity insurance is there to protect you against.

But it’s not the only thing. A solid policy will also take care of claims arising from:

• Defamation: harming someone’s reputation by unintentionally sharing false information about them, whether it’s spoken (slander), or in writing (libel).
• Infringement of intellectual property: using someone else’s intellectual property (IP) without their permission. For example, using a stock image in a press release without a valid licence.
• Breach of confidentiality: sharing personal data/private information with a third-party without the owner’s consent. Like political consulting company Cambridge Analytica did with Facebook users’ data.

That’s a lot of bang for your professional indemnity buck. But if you’re still not convinced you need it, heed these words from NC Insurance; ‘it’s becoming more common for clients to request that PI cover is in place before a business relationship commences.’

In other words, no professional indemnity cover, no contract. How’s that for an incentive?

Cyber insurance

As marketer Jacqui Grove rightly says, ‘the digital era has ushered in an abundance of data. PR professionals now have access to analytics tools that provide insights into audience behaviour, sentiment analysis, and the effectiveness of campaigns’.

But it’s also left us vulnerable to new forms of risk. Just ask Sony.

In 2011, the consumer electronics brand experienced one of the most notorious data breaches in history, when hackers infiltrated its PlayStation Network and extracted masses of personal data from more than 77 million users.

I’m talking names, addresses, birth dates, and credit card details. And it caused a ton of financial and operational damage. The network was down for almost a month as Sony scrambled to tighten its security measures. And the brand had to fork out $15m in compensation to affected gamers, and £250,000 in regulatory fines.

Digital risks

That’s a hefty price to pay for poor cyber security. So it’s just as well Sony could afford to foot the bill.

But few brands could whip out that much cash at a moment’s notice. Could you? If not, it’s worth taking out cyber insurance cover.

It’ll guard your agency against threats like malware and hacking ‘that are growing in severity but aren’t ‘covered by traditional insurance policies’ according to Coalition Insurance.

And it’ll save you forking out for:

• data recovery
• damage to software and digital assets
• ransom payments
• business interruption
• damages, legal fees, and regulatory fines
• client notification.

Given that 1.5 million UK businesses fell victim to some form of cyber attack in 2023, you can see why ProWriters says cyber insurance is a ‘fundamental source of protection for any business operating in the digital age.’

You’ve been told.

Where to get public relations insurance

So, that’s the lowdown on the insurance cover you need. But where can you get it?

You’ve got two options. Go direct. Or use an independent PR insurance broker. I recommend the latter. And for good reason. Direct insurers can only offer you one policy: theirs. But independent brokers have eyes on the whole market. And much like mortgage advisors, they’re not tied to any one insurer, so they won’t try and shoehorn you into a policy that doesn’t fit. On the contrary, a good one will take the time to understand the risks your PR agency faces and guide you through the maze of policies and premiums to find the right cover at the right price.

What’s more, if the worst happens and you’re faced with a claim, you’ll have a regulated adviser at the end of the phone to guide you through the process. What more could you want?

Tip: The British Insurance Brokers’ Association will save yourself hours of Googling. You can search the website for experts in particular types of insurance. Or call up and ask for recommendations of brokers with solid PR credentials.

How to find the right broker

Take it from an experienced PR pro. An independent insurance broker will save you a ton of time, money and hassle. But they’re not all created equal. To separate the wheat from the chaff, you need to do your due diligence.

Here are a few key questions to ask.

• Are they regulated?

Familiar with The Financial Conduct Authority? It’s an independent public body that regulates the UK’s financial services industry.

And, to quote REG Technologies, ‘it’s an offence under the Financial Services and Markets Act 2000 for a broker to operate in the UK without FCA authorisation’.

Good to know, right? With so much at stake, the last thing you need is bad financial advice from an unscrupulous broker. So be sure to run their name through the FCA’s Financial Services Register before you sign on the dotted line.

• Do they have PR expertise?

You need to feel confident that your broker has enough experience and understanding of the PR industry to find you the right cover. So do a bit of probing. Quiz them on the risks and challenges specific to the public relations sector. And ask them how many (and which) PR agencies they’ve worked with. If they give you names, reach out and ask your fellow PR bods if they recommend the broker.

It’s one thing for a broker to say their customer service is second to none. But the proof is in the pudding.

Tip: Talking of recommendations, don’t forget to check TrustPilot and Google reviews.

If no-one has anything nice to say, leave the broker well alone.

• What’s the fee structure?

Most insurance brokers charge a commission for their services. It’s usually a percentage of the premium. And the insurance company pays it. But some brokers charge additional fees for things like consultations, policy research, and claim filing.

So be sure to ask about the fee structure upfront to avoid costly surprises down the line.

• What support is provided?

The services and level of support offered by brokers varies greatly. So it’s worth knowing what you’ll get if you take out a policy. If the following services are part of the deal, the chances are your business is in safe hands.

Risk management advice

Some insurance brokers offer risk management advice. And it’s well worth taking. Not only will it help you identify and mitigate risks before accidents happen, it’s also a smart way to reduce your premiums and minimise claims.

Full claims support

If the worst happens and you need to make a claim, a broker is an invaluable resource. Particularly if they offer full claims support. Essentially, this means your broker will manage your claim from start to finish, advocate on your behalf, and ensure you receive fair treatment from the insurance company.

Who wouldn’t want that?

Tip: While you’re scoping out insurance brokers, take a look at PolicyBee. It’s the Chartered Institute of Public Relations’ (CIPR) broker of choice. If you’re a CIPR member, you can get insured through them for less via the CIPR Plus scheme.

Final word on PR insurance

If there’s one takeaway from my deep dive into public relations insurance, it’s this. PR insurance isn’t optional. It’s a must.

After all, as entrepreneur Lewis Howes, says: ‘no matter how much you plan and prepare, things can still go wrong’.

And I assure you, if something does go wrong and you’re not protected, at best it’ll leave a gaping hole in your wallet. At worst, you may have to close your PR agency for good.

Is it worth taking a gamble for the sake of a few hundred pounds? I don’t think so.

So, if you’re not insured, or unsure if you’re covered for the right things, get on to a reputable PR insurance broker and safeguard your business. Today.

Also: read our article about providing PR for Insurance Companies.