One thing all businesses have in common is a need to promote their services in order to find new clients, and remind existing clients to encourage repeat business. There are many ways to do this, but it’s easy for a simple advert or promotion to end up costing a lot more than originally planed due to what can often be a small oversight.

Here’s three real-life examples that show both how easy it is to make a mistake, but how it can also come at a heavy price to your business:

1. Don’t mislead the consumer

The Advertising Standards Authority has very clear and strict rules about what you can and can’t do or say in your advertising – including online. They receive complaints from businesses and the public and decide whether advertising is fair or not.

A recent complaint about advertising by the Green Deal Finance Company was upheld and deemed to be “misleading” to consumers on three counts.

This is significant, because if a consumer could demonstrate that they took advantage of Green Deal finance on the basis of statements made in the advertising and subsequently suffered a financial loss as a result of being misled, they could make a claim against the advertiser.

Whilst a professional indemnity policy would not deal with the ASA complaint or any ruling made by the ASA, it could help the company put right any loss incurred by someone it misleads, although it’s best to ensure your advertising is clear and not misleading in the first place.

2. Don’t use someone else’s logo without approval

A number of years ago, around the time of a major international sporting event, a chain of fast food stores decided a great way to drive sales would be to link their food with the eating occasion provided by friends and families gathering together to watch the sporting event.

They decided to produce a leaflet to highlight this connection, and delivered it to thousands of customers. Unfortunately, they used the logo of the sporting event and had not asked permission to do so.

Use of logos in this way is generally seen as an endorsement, for which substantial sums are usually paid, so the fast food company received a claim for misuse of intellectual property. In this instance, their professional indemnity policy, which was provided by Hiscox at the time, helped resolve the problem.

It’s only too easy to get carried away with Olympic/World Cup/Wimbledon/major event fever. However every year businesses large and small make similar costly mistakes.

3. Don’t use an image without approval

I previously wrote about the need to be careful when using images. A broker recently shared a cautionary tale with me that seemed to me a mistake anyone could make.

A small business won Business of the Year in his local awards. They went along to the awards dinner, where prizes were being handed out by a well-known Olympian. As is traditional, a photo of the businessman receiving his award from the Olympian was taken – and was sent for his personal use.

The businessman was very proud – not only of his award, but to have had his photo taken with the celebrity.  So proud, in fact, that he posted it on his company website and featured it as “news”, using the story of his recent win as endorsement of the quality service provided by his business.

The use of the photo came to the attention of the Olympian’s agent, who submitted an invoice for hundred’s of pounds on the grounds that his client made a living out of image rights and product endorsements.

Again, this can be avoided by making sure you have the rights to use images in your promotional material.  But in the unfortunate event something somehow slips through, a professional indemnity policy might help you resolve things with minimum disruption to your business.

Although these are varied examples, they show how easy it can be to make a small mistake when promoting your business, big or small. These mistakes can be easily avoided and can save your business a lot of stress and money.


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