How SEO / SEM Business Insurance Helps
Let's take a look at some of the risks your SEO / SEM business might face and the policies that can help cover unexpected costs.
- An intern has a social media mishap. An intern at your search engine marketing firm tweets a joke about your competitor. The competitor sees the tweet and calls its lawyers. Within 24 hours, your business is served with a lawsuit claiming the tweet caused $15,000 worth of damages to the competitor’s reputation. That's one expensive tweet! Good thing General Liability Insurance can help cover you, even if it's only to pay a lawyer to negotiate their lawyer down to a settlement.
- Your dissatisfied client sues. An online watch retailer hires your firm to rewrite copy for its website, maintain a blog, and improve its search rankings. After launching the revamped website, the watch retailer falls in Google rankings. It seems larger competing watch retailers also hired SEO companies and leapfrogged your client in the search results. Technically, you did your job, but that doesn't stop the watch retailer from filing a lawsuit for $50,000 in damages. Errors and Omissions Insurance can help cover your legal expenses, including the damages awarded to your (former) client.
- A fire hits your office. Let's say you rent office space for your SEM business. Your employee accidentally leaves her Yankee Candle burning on her desk overnight – and it starts a fire. The fire damages your computers and other equipment, as well as parts of the building itself. If you have a Business Owner's Policy (BOP), the Property Insurance portion can pay to replace your business property (computers, equipment, etc.). If the landlord sues you over the building's damage, the General Liability Insurance portion of your BOP can help pay for the expenses.
- An employee gets hurt. Your copywriter slips on some spilled coffee at the office and breaks an arm. The medical expenses end up costing $20,000. Workers' Compensation Insurance can help pay for the employee's medical bills and lost wages. And if the injury triggers a lawsuit, the Employer's Liability Insurance portion of your Workers' Comp coverage can help cover legal costs.
- An employee steals. Your SEO / SEM firm might need a Fidelity Bond / Employee Dishonesty Bond if you work with companies in the financial services sector. That way, if a copywriter guesses the password to the banker's network and wires money into his personal account, you won't be stuck with the bill. A Fidelity Bond can cover the employee's dishonest behavior, and the insurance company can reimburse the bank for the stolen money.
- A fired employee sues. Say you have an employee who's a real slacker. She is consistently late and often turns in sloppy, incomplete work. Frustrated with her performance, you fire her – only to get sued for wrongful termination a month later. She claims she never received any evaluations or feedback on her performance – which is true. Because you have no documentation to back up your claim, you have to pay $100,000 in damages. Fortunately, your Employment Practices Liability Insurance can cover the legal expenses.
How SEO / SEM Businesses Can Avoid Lawsuits through Risk Management
It's important for SEO / SEM firms to remember that risk management does not begin and end with insurance. You need to actively work to reduce the chance of lawsuits, too.
To help you protect your small business, we offer a variety of risk management resources. Browse our site to learn about minimizing your risk of contractor lawsuits, how insurance can help your IT business thrive, and the cost of insurance for a small business.
Or you can visit our resources page for more tips.