Not so fast! Let’s take a closer look…
Lots of things seem like a good idea at first, but after a closer look they are actually really bad. Cutting your own bangs, getting a spontaneous tattoo, taking relationship advice from the internet…. Among these really bad ideas is relying on a cyber insurance policy for your media liability exposures. Yes, media coverage can be added to a cyber or tech policy, but it pales in comparison to the coverage offered by a real, bona fide Media Liability policy.
The Pitfalls of Relying on Cyber Insurance for Media Liability
You don’t want to have to learn this the hard way. Recently, a media litigator told me about his client who was left paying hundreds of thousands of dollars in defense costs because it had media risks, but didn’t have a media policy. The coverage that client purchased was basically worthless for the lawsuit they had to defend.
Work with your broker ASAP to make sure that you are getting the right coverage for your actual risk exposure. They are experts and know their way through the dizzying array of options.
Ok. So, what’s wrong with cyber media coverage?
- Claims-Made vs. Occurrence-Based Coverage
For one thing, cyber coverage is typically “claims made” coverage and only provides coverage for claims made during the policy period. Often, the coverage is further restricted to be “claims made and reported,” which will only cover claims made and (you guessed it) reported during that policy period. Contrast that with a typical Media Liability policy, which is usually structured as occurrence-based coverage, where the policy will provide coverage literally FOREVER for claims arising out of an “occurrence” taking place during the policy period. Cyber claims tend to be what we in the business call “short-tail,” meaning that claims will arise and usually be concluded in short amount of time — typically a matter of months. Media exposures, however, tend to be “long-tail” and can take years for the claims to arise; and because they are often litigated, they won’t be completely resolved for several years on top of that. In this instance, before a media claim is resolved, the limit may be gone or diminished from any cyber claims that were paid earlier.
- Coverage for Intentional Conduct and Punitive Damages
Next, Media Liability policies offer coverage that other less specialized policies do not. Cyber, Tech and other E&O coverage usually flat-out exclude coverage for claims arising out of intentional conduct or an award of punitive damages. Defamation, for example, is an intentional tort. Willful copyright infringement allegations are common. Plaintiffs claim punitive damages all the time. These things will NOT be covered in policies with those very common exclusions. A Media Liability policy will cover intentional conduct and punitive damages. Cyber? Nope.
- Media Litigation Expertise
There are other unique exposures that come with publishing and disseminating content. Subpoenaed in a lawsuit between other parties (not you) about something you published, and you need to hire a lawyer to respond? Media Liability offers coverage endorsements for attorney fees associated with responding to these kinds of subpoenas. Cyber? Nope.
An elected official or government representative tried to intervene to prevent you from publishing something. Media Liability offers First Amendment Restraint coverage endorsements that will fund the attorney fees for responding to that and protecting your interests. Cyber? Nope again.
Media Liability policies cover esoteric and complex claims like defamation, invasion of privacy, trademark or copyright infringement, and right of publicity. These complex claims require expert, specialized attorneys to defend them. Generally speaking, you don’t want generalist litigators to defend these specialized matters. A bona fide Media Liability insurance carrier has longstanding relationships with specialized media litigators and will retain them to defend these claims. Cyber? Nope.
Recently, a media litigator told me about his client who was left paying hundreds of thousands of dollars in defense costs because it had media risks, but didn’t have a media policy. The coverage that client purchased was basically worthless for the lawsuit they had to defend.
Specialized Risks Require Specialized Coverage
In conversations with insurance brokers and agents in this space, we hear often that cyber policies are “a dime a dozen.” Take a look at the marketplace. There are hundreds of options to place your cyber exposure. The number of valued, credible and expert Media Liability carriers is but a small fraction of that. Cyber is mass produced, and Media Liability is a specialized product tailored to a much more specialized group of content creators and publishers.
After taking a closer look, you can see that protecting specialized content creation requires specialized Media Liability Insurance. Don’t short-change yourself by relying on coverage that is not equipped to provide the coverage you really need.
Do yourself a favor and reach out to your broker today and ask about taking a closer look at the right coverage to fit your needs.