Opportunities for the insurance market: media risks - part two

The Taylor Wessing insurance group, in conjunction with its media group, commissioned a survey designed to assess the extent to which businesses were aware of risks associated with the use of the internet and social media and the extent to which the insurance industry has adapted to provide suitable insurance cover for those risks.  View the results of the survey here.

This two-part series provides an analysis of some of the potential risks which many businesses do not appear to have recognised or understood and the opportunities for the insurance market to provide bespoke cover for those emerging risks.

Advertising

Misleading statements

Business to business – Misleading advertising

If a business is advertising to another business it needs to ensure that its adverts comply with the Business Protection from Misleading Marketing Regulations 2008. If they do not, this may be a criminal offence. An advert, which is defined as "any form of representation which is made in connection with a trade, business, craft or profession in order to promote the supply or transfer of a product", must not be misleading. The test is whether the advert "in any way, including its presentation, deceives or is likely to deceive the traders to whom it is addressed or whom it reaches; and by reason of its deceptive nature, is likely to affect their economic behaviour; or for those reasons, injures or is likely to injure a competitor".

Business to consumer — Unfair trading

Where advertising to consumers, an advert must comply with the Consumer Protection from Unfair Trading Regulations 2008. Broadly, the regulations prohibit the following unfair commercial practices if they cause, or are likely to cause, the average consumer to take a transactional decision that he or she would not have taken otherwise:

• commercial practices which contravene the requirements of professional diligence;
• misleading actions, such as providing false information or providing marketing which may confuse consumers into making an uninformed decision; and
• misleading omissions e.g. omitting or hiding material information or providing it in an unclear, unintelligible or untimely manner.

Download the complete article (PDF) or review online (registration required) 

Lawyers Peter Kempe, Niri Shanmuganathan

This article first appeared on Thomson Reuters Accelus www.complinet.com