If you make any use of social media, you will be familiar with these kinds of promotions. “Liking” stuff on Facebook, retweeting things on Twitter – brands think that getting this kind of attention and wider distribution will drive awareness of their brand/product and then purchase.

And it might – although it probably annoys just as many people, as (depending on your friends, of course) it can result in a newsfeed filled with irrelevant and irritating clutter.  It’s a particular bugbear of mine – especially on LinkedIn – a professional network  where it just feels out of place.

Anyway.  I digress.

What could possibly go wrong?  Well, quite a lot, actually.  Many of these kinds of promotions are spam – offering to give away a car is likely to get you a load of (meaningless) likes, but once you’ve collected all those likes, the page concerned has a monetary value.  It can be sold on – and the page (and its distribution list) repurposed.  So far, so murky.

But what if it is a genuine promotion?  Some of them are!  A big high-end branded car dealership in Ireland recently had a very uncomfortable time when they were accused of not actually giving away the car they had offered for a long weekend in return for “likes”. The “winner” did not exist on Facebook, so the dealership found itself justifying how that person could possibly have won – indeed, did they even exist?

It transpires they did exist – the winner had asked for the prize to be awarded to his mother who does not have a Facebook profile.  So fair enough.  But what was intended to be a great way to generate excitement around the brand and car turned into a time-consuming and potentially damaging situation.

What can we learn from this, and how might a professional indemnity policy help?

Many PR companies actively promote social media as a way to get brand awareness; done well, it is a great tool.  What if it goes wrong though?

  • A policy written specifically for PR and marketing companies can sometimes go one step further than paying to defend a claim. It may, for example, pay out without a claim from a dissatisfied client actually needing to be made – this is often known as rectification costs.  The idea behind this is to protect your long-term relationship with your client. If you become aware that something has gone wrong that is likely to result in a claim, it is better for you to act quickly (with help from your insurer) to put it right asap. Sometimes before the client even becomes aware there has been a problem.
  • When something goes wrong, it might be that the client refuses to pay; taking your client to court for non-payment could result in a counter-claim for negligence.  A professional indemnity policy written for marketing specialists may include cover for avoiding a potential claim against you, which means the insurer could pay the outstanding amount owing to you without you having to force the issue and take your client to court for non-payment.

All policy wordings vary, but if you work in a marketing or PR business, it is worth looking for specialist wording and checking to see if the two points above are covered.

Insurance can protect your business in a range of scenarios. To find out how Hiscox could protect your business visit our Professional Indemnity Insurance page.