According to Murphy’s Law ‘if there are two or more ways to do something, and one of those ways can result in a catastrophe, then someone at some point will choose the catastrophic way’. Pessimistic perhaps, but for small businesses in the marketing, media and advertising world there is more than a whiff of Murphy’s inevitability that however careful and professional you are, something will go wrong at some stage.

It could be a typo in a brochure you produce for a client, or a breach of copyright for an image you use on a client’s website to give just two examples, but whatever it is, it could be very damaging to your long term client relationship.

The challenge then, even more so when a single client relationship is critical to your business, is how can the impact of an error be minimised once Murphy has struck so that even after a problem, your client is happy to retain your services?

Pulling a triumph out of a disaster

The good news is, even the biggest of disasters can be turned around, to the point where the impact of a mistake has been minimised, or even not noticed by the client. Here’s a case in point: an advertising agency we insure for professional indemnity – insurance to protect against professional negligence – went live with a high profile TV campaign they had developed for their client.

Shortly after the advertisement began to air it became clear that the agency had failed to secure the licensing agreement for the music used in the advert. Before the client was even aware of the problem, the agency turned to us to come up with a solution. We were able to negotiate with the licence holders and settle on a level of compensation to ensure the advert could continue to be used. And the client never heard a whisper about the problem.

The key is in taking proactive action at an early stage. Professional indemnity insurance is there to help when a claim goes to court and the lawyers get involved, but many small businesses don’t realise that a good professional indemnity policy can also help rectify a problem before a client even knows about the problem and long before the lawyers need to get involved.

Who owns that imagyou used?

We’re often notified by clients who have produced marketing literature for a client and then realised they have made a mistake whether it’s a typo or, in one case we dealt with, a calendar featuring February 31st. In many cases, we’ve been able to pay for the material to be reprinted before the client was aware of a problem.

Another common issue we see are agencies using images from a stock library that they believed (usually in good faith) to be royalty free but subsequently turn out to be copyright owned by organisations such as Getty who are quite ingenious (and rigorous) at monitoring usage of their images. Again, we’ve been able to intervene to help smooth things over.

The point being in all these instances is that if your professional indemnity insurer is notified as soon as there is a potential problem with work you’ve done for a client, they may well be able to help rectify the mistake even before the client notices. Even if the client is aware, early notification means your insurer can help mediate a settlement that will, in many cases, appease your client and hopefully protect a long term relationship.

First line of defence

Professional indemnity insurance is the first line in your defence when the inevitable mistake happens and your insurer should, as soon as they are notified, be proactive in helping you resolve the problem to your client’s satisfaction. Our advice for every small business operating in the marketing, media and advertising sectors is to:

  • Check you have the appropriate amount of professional indemnity cover (and that it includes rectification cover)
  • Let your insurer know as soon as you think there might be a problem – not all notifications will lead to a claim but as an insurer we’d prefer to know as early as possible (that way we can judge whether early intervention is necessary)

By the way, if any further evidence was needed around the importance of early action, it’s also worth remembering that the second rule to Murphy’s Law is that ‘left to themselves, things tend to go from bad to worse’.

Visit our main site for more information on our Professional Indemnity Insurance for small businesses.