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3 Online Mistakes That Could Land Your Business in Court

Rebecca Hosley

Rebecca Hosley is a content writer for Insureon, an online small business insurance agency. She is based in Chicago and writes frequently about small business insurance and tech startups.

Online advertising, social media, and your company website are all useful tools for promoting your small business. A clever online ad campaign or Facebook post that goes viral can boost visibility and help drive sales, but it could also put your business at risk for an advertising injury lawsuit. Here are three mistakes that can arise from online marketing, along with tips on how to protect your business from the financial repercussions of online advertising errors with general liability insurance.

1. Using Photos Without Proper Authorization

Visual content is king, and it’s important to have eye-catching photographs in order to capture your audience’s attention. But where do you find them? Hiring a professional photographer can be expensive, which can cause some business owners to simply scour the web for the perfect image. But downloading and using photos you don’t own the rights to could land your business in court.

Once someone takes a photograph, they own the copyright. If you use someone else’s photo without permission, they could sue you for copyright infringement. A better option is to pay for a subscription to a professional stock photography company, such as Shutterstock or iStockphoto, which allows users to choose from thousands of images. If you’re on a tight budget, there are also sites like StockSnap.io and Pexels that offer access to several copyright-free photos. Just be aware that most sites will require you to create a membership profile, and some will also charge you a membership fee. However, you are then free to download and use any images you find on the sites without restriction.

Even if the photo is one you took yourself, it could still get your business in legal trouble. For example, if the photo features your customers, they could sue you for invasion of privacy if you didn’t get their permission before using the image. You can prevent privacy invasion lawsuits by obtaining a signed release from anyone featured in photos being used to promote your business, including on your website, your social media channels, or any advertising you do.

If you are running a social media influencer campaign, you should also make sure that any posts clearly state it is sponsored content to avoid running afoul of the Federal Trade Commission (FTC).

online-mistakes

2. Infringing on Another Business’s Trademark

Imitation may be the sincerest form of flattery, but it can also make your business the target of a trademark lawsuit.

Let’s say you own a store that sells baked goods. One of your competitors recently created a new logo that incorporates a chocolate chip cookie and a plain donut into the letters of the company name. You think it’s a cute idea, and create a similar logo for your own business—using a lemon cookie and a chocolate donut. Your business name, the font, and the featured sweets are all different, but it still resembles your competitor’s logo so closely that you are sued shortly after you upload the new design to your website.

Even if the design isn’t an exact copy, you could still be found guilty of violating a competitor’s trademark if the court finds that your logo is similar enough to cause potential customer confusion and harm your competitor’s brand.

If you are designing a new logo or slogan for your business, make sure it isn’t too similar to one already being used by another company. And if you aren’t sure how close is too close, consult with a trademark attorney for guidance.

3. Libeling or Slandering a Competitor

If you don’t think highly of one of your business rivals, it can be tempting to let others know. For example, let’s say you own a pool installation company and have heard from multiple customers that one of your competitors does sloppy work, resulting in the need for frequent minor repairs. You pride yourself on doing the job right the first time, and are upset to learn another business in your area is making so many mistakes—and potentially giving homeowners a bad impression of all pool installers.

One day while doing a Twitter Q&A to answer customers’ pool maintenance questions, a woman brings up this competitor and mentions what a bad job the company did while installing her pool. In response, you tweet that your competitor is known for shoddy work, and that people should avoid hiring the business at all costs. If that competitor sees your tweet, your business could be sued for libel, which is defined as a written or published defamatory statement.

As frustrating as it can be when you think competitors are behaving unprofessionally or doing poor work, it’s better to not attack them directly. Let the quality of your business’s work speak for itself, rather than disparage the competition and run the risk of a lawsuit.

Note that the same holds true if you are talking to someone about a competitor, since any negative verbal remark you make could potentially lead to a lawsuit for slander.

online-mistakes

General Liability Insurance Protects Against Advertising Injury Lawsuits

While it is commonly known as “slip and fall” insurance because it covers costs associated with third-party injuries, general liability insurance can also pay for expenses associated with advertising injury lawsuits. That includes when a business is sued for:

  • Invasion of privacy
  • Copyright or trademark infringement
  • Libel or slander

If your business is sued, your general liability policy can pay for legal expenses such as lawyer fees, court costs, and judgments against your business if you lose the case.

There is an exception for companies that provide certain media services, such as advertising agencies, publishers, broadcasters, internet service providers, and website designers. Because the risk of an advertising injury lawsuit is much higher, general liability insurance doesn’t typically cover businesses in those industries. Instead, business owners would need to purchase a separate policy known as media liability insurance, which functions like the advertising injury coverage in a standard general liability policy but is designed specifically for media businesses.

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Marketing your company online is an excellent way to raise your profile. Just make sure you aren’t speaking negatively about competitors or infringing on someone else’s copyright, trademark, or privacy while doing so.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

Rebecca Hosley

Rebecca Hosley is a content writer for Insureon, an online small business insurance agency. She is based in Chicago and writes frequently about small business insurance and tech startups.

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