More brands are demanding creators get influencer insurance before they'll agree to work together. Surprised? Considering some of the lawsuits hitting sponsored content, you probably shouldn't be.
But the new demands, according to an article in Bloomberg Law, are taking some smaller influencers by surprise. And making them reconsider whether those partnerships are even worth it.
Let's take a look at what insurance companies are demanding of influencers, why they might need it, how much it typically costs, and what happens if you choose to forego it.
What Is Influencer Insurance?
Influencer insurance isn't really a new type of insurance just for social media and online personalities. But because so many influencers are hearing about it for the first time when looking at deals with brands, it's easy to associate it with the $21 billion influencer industry.
In reality, it's just liability insurance. There are three types of liability insurance — general, professional, and employer. In most cases, brands are asking influencers to purchase general liability insurance policies.
These policies cover things like bodily injury and property damage, reputational harm, and copyright infringement claims due to advertising error (this is the big one). In other words, if an influencer goes out on the street to film a sponsored bit and accidentally bumps into somebody and chips their tooth, this insurance would cover them should that person choose to pursue monetary damages.
It's important to note that this insurance doesn't actually cover anything that may happen to the influencer or their team — just anything they might cause to happen to others. The "advertising error" part is big, because this is where most of the lawsuits focus right now.
If an influencer uses music or images without purchasing the license to do so, for instance, they and the company that hired them are on the hook.
Why Influencers Are Being Asked To Buy Insurance
"Influencer insurance" isn't a new concept, especially in media. In fact, most television, film, and music productions have been buying insurance for a long time. When a crew of 150 people roll in with huge trucks and equipment to film something in a fast-paced environment, you can imagine the opportunity for something to go wrong. Even smaller independent productions will usually need to prove they have insurance to cover a location.
A lot of small businesses end up needing liability insurance at some point.
But many smaller influencers probably don't think of themselves as a small business yet — even though they're generating hundreds to thousands of dollars per sponsored post. And they don't understand the responsibilities that come along with those videos. Like the fact that they technically can't show other brands or logos in their sponsored content. Or that they need to get release forms signed by anybody they interact with on camera. Or if they're filming out in public and the camera films an underage person, they may need to get permission from that child's guardian (there are some exceptions for public spaces).
And then there's the biggest one, which is being sure not to infringe on copyrights. That includes using music clips you don't have the rights to, including clips of TV or films, or other imagery you don't own. All of it can — and has — led to big lawsuits. Which is exactly why many brands are making it part of their contract terms when working with influencers.
What Does Influencer Insurance Cost — And Is It Worth It?
Here's where the heart of the issue lies. For many larger influencers with a manager, business manager, and other team components, insurance is probably already a frequent expense. These individuals are really full-fledged businesses with employees. Either they or their primary brand deal liaison already know they need to protect themselves.
But what about micro and nano influencers? The individuals with maybe ten to 50,000 niche followers who are interested specifically in one area of their brand. Many of these content creators don't have the same infrastructure as larger influencers, but are being asked to play by the same rules.
Liability insurance covers total dollar amounts. So you purchase the insurance to cover a potential total sum of damages. A typical coverage amount may be $1 million. And what that actually means out-of-pocket for influencers can vary wildly. "Costs vary, but annual premiums for a $1 million liability insurance policy would cost anywhere between $2,000 to $30,000 a year, depending on the influencer’s notoriety, their specialized areas, and their social media platforms, according to insurers and brokers," Bloomberg Law says.
That's a big expense for somebody only making a few hundred dollars a month from posts. One larger influencer said brands like Coca-Cola and Disney require personalities to carry at least $5 million worth of coverage — often for multiple years.
So Is It Worth It If You're A Smaller Creator?
That really depends on your ambitions. After all, some content creators specifically want to be influencers. Others start making content in order to promote their own brands — but then also see the opportunity to be an influencer of sorts, as well. There are plenty of opportunities, both in social media apps and led by third parties, for people who never "thought" of themselves as an influencer to accept money and products to make content featuring a brand.
If your goal is to continue building your personal profile in order to work with brands, getting liability insurance is pretty much an inevitability. If it's not a major financial strain right now, you might as well look into holding a liability insurance policy. Even if brands haven't yet asked you to prove you have it — eventually, they will.
However, if your primary goal is to promote yourself and your content and a brand approaches you with a partnership opportunity that requires insurance, it honestly just may not be worth it for you to work with that brand.
Insurance is ultimately one of those things everybody hates paying for until they need it. And any content creator (read: business) that has enough success will need liability insurance at some point. You just need to decide where your priorities are and where you're at in your journey when it comes to working with brands that ask for it.
Oh, and don't be surprised if a whole new marketplace of "influencer insurance" pops up in the very near future.