Is your agency well-enough insured?
The rapid spread of coronavirus right around the world in just a few months shows just how quickly unforeseen circumstances can hit. More than half the world’s citizens are on lockdown, the markets are volatile, and uncertainty stalks all corners of the world. With many businesses shuttered and many others learning how to carry on trading with their workforce all working from home, no sector is immune from disruption.
At the best of times, advertisers are hugely dependant on their agency partners, from global agencies of record to smaller, national affiliates and on-the-ground implementation partners. One issue that many brands often do not consider deeply is the need for adequate insurance agency-side in the event that events outside their control – in this case the global pandemic – force their partners to halt operations, even if only temporarily.
Advertisers should ensure that their agency partners have sufficient insurance cover in place to mitigate risks and continue to operate in the case of unpredictable local or global events. There are five principle areas of risk to consider.
- General commercial liabilitycan help small businesses pay for unexpected lawsuits, sign deals with new clients, rent commercial space, and avoid bankruptcy.
- Professional indemnityis a category of insurance protecting a business against claims made against them in respect to their legal liability of loss arising from a breach of professional duty.
- Third-party insuranceis essentially a form of liability insurance for protection against the claims of another (third party). The first party is responsible for their damages or losses, regardless of the cause of the cause of damage, and third-party insurance protects all links in the chain.
- Workers' compensationprovides benefits to employees who get injured or sick from a work-related cause. It also includes disability benefits, missed wage replacement, and in-service death benefits. Workers' comp also reduces your liability for work-related injuries and illnesses.
- Credit insurance is a tool that helps companies to expand business with peace of mind. It protects against customer defaults. What’s more, it covers sales of companies to their buyers on credit against the risk of loss due to the insolvency of customers.
Although it’s a sensible precaution to check that you and your agency partners have sufficient insurance cover in place before a crisis strikes, the COVID-19 pandemic provides all advertisers with a timely reminder. Marketers should discuss with their agency partners the business continuity plans they have in place, including what minimum support levels will be available during the uncertain weeks and months ahead. Relevant insurance clauses and the specific value of insurance cover against each policy should be on the agenda in these conversations.
These are the five areas of insurance coverage that we believe are the most important for brands to consider during the coronavirus pandemic. But advertisers should identify and address those coverage areas and policies that suit them best, per their individual exposure and appetite for risk.