Canadian Underwriter

Covering influencers: Don’t forget to like and subscribe…and insure

February 11, 2021   by Adam Malik

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Brokers looking for growth opportunities should pay closer attention to the social media influencer market, an expert in the field recommends.

It’s a multi-billion-dollar industry and has only continued its rapid rise during the pandemic, according to Meghan Argier, media and entertainment underwriter at Beazley Canada. And there are plenty of risks to which clients can be exposed while doing their job.

Corporations describe “influencers” as people who have expertise in an area or level of social influence. Companies will engage with this person to promote their brands through endorsements or product placements. The industry is expected to be worth US$15 billion by 2022, making it an opportunity for brokers to capitalize on the growth.

“The amount of content that’s being created and influencers being engaged to help produce is staggering at this point,” Argier told Canadian Underwriter. “There are definitely a lot of opportunities because it’s growing and also because it works.”

Influencers need insurance protection. Brokers uncertain about venturing into this new area of coverage can rest assured: Working with influencers isn’t too far away from working with an industry with which they’re already familiar — traditional publishers. Except in the example of influencers, brokers will deal strictly with providing coverage for clients as a result of online content.

“[The] types of risks and exposures [for influencers] are typical with copyright and trademark exposures, libel and trade libel, privacy exposures, breach of contract,” Argier explained. “Usually, they’re [insuring risks associated with] contracts that the influencer has signed with various brands and where there is a contract signed.”

The biggest risk exposure influencers face is breach of rights, in which they fail to obtain a licence or clearance for third-party intellectual property they use to make their own content.

“It’s more about being aware that products are available, and then knowing what the exposures are as a starting point,” Argier said of brokers looking to expand into this class of business. “We find lots of people are online, but when a blogger or influencer is entering into contracts and actually using online advertising to make money, this is where there is opportunity for insurance to come into play — where an advertiser or brand has a requirement for insurance written into their contract with the influencer.”

The COVID-19 pandemic is also playing a role in the growth of influencers. With people home more and perhaps using their phones and social media more, the reach of influencers has expanded — and brands are taking notice.

“You’ve also seen organizations like the WHO engage influencers and go out there to promote best practices for coronavirus, hand care, and all of that,” Argier said.

Insurers will have a few key questions about a broker’s influencer client; namely, they will want to understand the content they’re producing. Apart from some general questions, Argier said, underwriters will ask “what platforms they are using for this content, how many followers do they have, [in addition to] things like knowing who their usual audience is, and what current contracts they might have in place with specific brands. That gives the underwriter a good idea of how many people are viewing the content.”

From there, it’s about risk management. It’s about making sure all of the content they’re using is their own or, if they’re using third-party content, making sure they have the proper permissions and licensing.

“It’s less about the platform and more about the content, how many people actually see it, and the controls that they have in place,” Argier said.


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