Why Social Media Liability Insurance is Important for Influencers & Creators?

Social Media Liability Insurance

Social media influencer marketing has exploded in popularity over the past decade. According to data compiled by Linktree, about 41 million artists have between ten thousand and one hundred thousand followers. Brands can now take full advantage of the talents of content creators and the power of influencer marketing to expand their customer bases and spark interest among new demographics. Around 92% of influencers and content creators use social media platforms such as Instagram, YouTube, and TikTok to promote their brands and reach a larger audience. With the increasing popularity of influencer marketing and the rise of user-generated content, social media has become an essential tool for marketers and businesses to reach consumers.

However, with the increasing use of social media, the risk of lawsuits and claims against influencers and content creators has also increased. Intelligent business pioneers won’t fumble their way through. Instead, they ensure they are protected from any financial or public relations fallout from botched influencer marketing efforts. Sure enough, it is occasionally the case. Innovative companies protect themselves by investing in influencer insurance.

This article discusses the pitfalls and difficulties that might arise out of nowhere, forcing brands into uncharted areas when it comes to influencer marketing. Let’s also discuss the need for social media liability insurance for content creators and influencers.

Risks of Influencer Marketing

Although influencer marketing is expected to increase to over $24.1 billion by 2025, this dynamic and rapidly rising business is not without its challenges. They seemingly materialize out of thin air rather frequently. Some of the risks we’ve outlined below start as minor inconveniences but can quickly escalate into expensive court cases. Let’s look at some of the common threats that brand/influencer teams have to deal with.

FTC Noncompliance

In order to protect consumers, the FTC advises influencers to label sponsored material using the hashtags #sponsored or #ad. Unfortunately, not all artists are so cautious.   As was to be expected, the FTC has taken a hard stance against content creators and influencers, changing its influencer guidelines from voluntary recommendations to legally binding regulations. To avoid being caught off guard, keeping an eye on the FTC’s ever-evolving laws is important.

The FTC isn’t the only organization that keeps tabs on influencers. Kim Kardashian, along with boxer Floyd Mayweather Jr. and NBA player Paul Pierce, was accused of promoting a cryptocurrency as part of a plan to artificially inflate the coin’s value before selling it to investors, and this week, Kardashian agreed to pay a $1.26 million fine levied by the US Securities and Exchange Commission.

Unmet Expectations

Conflicts between well-known influencers and brands often make headlines when the former fail to live up to the latter’s promises. When commitments are disregarded or disregarded, and pledges are breached, legal battles are typically the result. A well-written legal contract, known as an influencer brief, can help ensure that both brands and influencers are on the same page. Unmet expectations, however, can still lead to trouble, regardless of the law. By maintaining an honest and open line of communication, influencers and brands may prevent these costly mishaps.

Legal Liability

Defamation (libel), copyright and trademark infringement, breach of confidentiality, negligent misstatement, and personal injury are possible legal consequences of reckless speech (arising from content). This is the thing: what seems innocuous to one person may be offensive to another. While it’s no fun to constantly watch your step, knowing the extent of your legal liability is essential for any influencer marketing campaign.

Decline in Business

 Sometimes technology fails us, and there are many causes of service interruptions ranging from maintenance to cyber extortion. If influencers and brands depend on a cloud service, and that service suddenly goes down, it might be disastrous for businesses. Brands typically take the hit when content creators and influencers cannot carry out their duties (i.e., lost income, lawsuits, extra operating costs, etc.).

Information Security

New cyber liability issues have pushed cybersecurity up the priority list for most firm executives. Think about the significant hacks that hit Robinhood and Twitch in 2021. Data breaches cost US organisations an average of almost $4 million for every event, even though they are only information leaks or security violations. Data security has been elevated to the top priority list because hackers are well-versed in many influencer marketing networks used by brands.

What is Influencer Insurance, and Why is it Important?

Media liability insurance, often known as influencer insurance, shields content creators and companies against legal action arising from their social media efforts.


A recent survey found that over 50% of influencers and content creators are unaware of social media liability insurance, and only 20% have taken out a policy. This is a concerning trend, as legal disputes involving influencers and content creators are rising. The same survey found that over 70% of influencers and content creators have faced legal issues related to their online presence, with over 60% of those cases resulting in financial losses.

Companies need to protect their influencers against the common threats they encounter. Those partaking in influencer marketing should strongly consider insuring themselves against the following risks:

Advertising Exposures: This insurance protects against a brand or advertising agency alleging a breach of contract.

Publishing Exposures: Defamation, copyright infringement, breach of confidentiality, careless misstatements, and personal harm are all covered by this section.

Regulatory exposures: The FTC’s inquiry and defence fees can pile up rapidly, but these coverage guards against failing to declare sponsored endorsement.

Custom insurance policies are the only ones that can guarantee the safety of businesses and their influencers. In addition, the following is a selection of the types of media outlets brands typically use to achieve their influencer marketing aims:

  • The cornerstone of any risk management strategy is general liability insurance, which shields companies’ names from standard operating risks.
  • Loss of income and additional costs are covered by business interruption insurance.
  • Brands can avoid financial ruin in the event of cyberattacks thanks to cyber liability insurance.
  • Companies can get their money back if they suffer a direct loss of property thanks to property insurance.
  • Your business can benefit from product liability insurance if you’re concerned about lawsuits alleging that your product or service directly or indirectly caused injury or damage.
  • Brands may rest easy knowing they are covered by professional liability insurance in the event of a claim of subpar workmanship or service.

In Conclusion

Social media liability insurance is essential for influencers and creators as it protects them from potential legal and financial risks arising from their online activities. Insurance covers various risks such as defamation, copyright infringement, invasion of privacy, and more. In today’s digital age, where the line between personal and professional life is becoming increasingly blurred, social media liability insurance provides a safety net for individuals who rely on their online presence for their livelihood. By having this insurance, influencers and creators can operate their social media accounts with peace of mind, knowing that they are protected against potential legal and financial repercussions.