Advertising Campaign Gets Really Expensive Due To a Typing Error
Working in online marketing requires flexibility, resilience to stress and the ability to keep an eye on a lot of things at once. A freelance online marketing manager was particularly challenged in this respect when he was spontaneously commissioned by his client, a retail chain, to look after the company’s internal Facebook account. The freelancer recounts the event:
“In addition to my usual tasks, I took over the management of the budgets in Facebook and reallocated the budgets according to the performance in the system, since several campaigns were running at the same time.”
When setting the budget, the freelancer made a serious mistake: The retail chain had released 15.000 euros per campaign for the planned advertising measures. When entering the budget, the online marketing manager used commas to separate the decimal place as is usual in Germany (e.g. 15,00 = fifteen euros). However, since Facebook is a US company, the system requires American numerical values. So it would have been correct to use the comma as a thousands separator (15,000). As a result, Facebook interpreted the numbers as 15 million euros instead of the agreed 15.000 euros, and the disaster took its course...
Overstretched Budget For Facebook Advertising - Who Bears the Costs?
Two days passed before the error was noticed and could be corrected. In this short time, Facebook had already invested almost 250.000 euros in the advertising campaign. Faced with this staggering sum, the freelancer decided to contact exali's account management professionals, who immediately escalated the case to the insurer’s claims department. In the first step, he calculated the official amount of damage: After deducting the originally planned budget for the advertising campaign, it amounted to over 230.000 euros. Now an obvious and difficult question arose: Who should bear the costs here?
As Facebook’s legal entity is located in Dublin, the insurer faced particular challenges in clarifying the claim. In order to ensure contact with Facebook and also to be able to carefully check possible mistakes made by the social media platform, the parties involved resorted to the support of Irish correspondent lawyers. The policyholder also found this time nerve-wracking and turbulent:
“Some time passed for the clarification of the damage, since many parties were involved. For me, the mistake that happened to me was a big shock. Nothing like this has ever happened to me before. It also took me quite a long time to recover from it.”
Hard-Earned Agreement On Overpriced Advertising Campaign
The long negotiations were successful in the end - Facebook Dublin and the client of the freelance online marketing manager agreed on a settlement of around 70.000 euros, which the insurer paid including legal fees of over 15.000 euros. The remaining amount of the damage was left to the retail chain that commissioned the advertising campaign. In the end, the insurer incurred costs of around 85.000 euros for a misinterpreted decimal point. But why did the insurer step into the breach here?
Protection Against Slight And Gross Negligence
Ultimately, the professional error, which was committed with slight or perhaps even gross negligence, lay with the freelancer. With a Professional Indemnity Insurance, however, it makes no difference whether the damage was caused by slight or gross negligence. Only intentional action is excluded. In the present case, the error led to a financial damage (or in insurance terms: financial loss) at the client. Such (pure) financial losses are already included in the Professional Indemnity Insurance via exali in the basic protection. In addition, the “Facebook Ads” field of activity is of course covered by the blanket coverage.
Insured activities in the media sector
The insurance covers claims of compensation due to the activities of a company in the media sector (e.g. as a media agency) or a freelancer under the blanket coverage for the profession, in particular (...) as an online marketing agency, e.g. in the area of affiliate, SEO, SEM, CRO, social media…
Therefore it was clear relatively quickly that the damage that had occurred was covered by the Professional Indemnity Insurance.
Nevertheless, the case naturally gave our policyholder a real fright at first. But this damage event also gave him some insights that could also help other online marketing managers work preventively:
“I advise anyone who controls operational campaigns to ALWAYS have budget adjustments approved by their clients or to insist on the four-eyes principle. There are also security measures in the Facebook account. For example, I can get automated emails as soon as the amount spent exceeds a certain value.”
Prepared For All Eventualities
Being a freelancer is demanding, and activities in the media sector in particular require resistance to stress, spontaneity and often enough the ability to multitask. However, despite all efforts, there is an inconsiderable risk that an error will creep into the work. Fortunately, these mishaps don’t necessarily result in such great damage as the comma error in this case, but fines due to an imprint error or even claims for damages can cost you dearly!
The Professional Indemnity Insurance for Media Professions via exali is at your side for all these risks. The insurer not only pays justified claims from clients or other third parties, but also fends off unfounded claims. So you can always get your work done with peace of mind.
Our customer service experts will be happy to answer any questions you may have - Monday to Friday from 9:00 a.m. to 6:00 p.m. on 0821/80 99 46 - 0 or via our contact form.
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<span class='visible--desktop'>First-Party Cyber and Data Risks Insurance (FPC)</span>
<span class='visible--tablet'>First-Party Cyber and Data Risks Insurance (FPC)</span>
<span class='visible--mobile'>FIrst-Party Cyber and Data Risks Insurance (FPC)</span>
<span class='visible--desktop'><p><strong>This add-on protects your business from the risk of hacking, DDoS attacks or other internet crime.</strong></p>
<p>Reimbursed/covered:<strong> </strong>for example costs for the <strong>restoration of your IT systems</strong>, the commissioning of professional <strong>computer forensics analysts</strong> or specialised <strong>lawyers</strong> (including criminal defence) as well as for <strong>crisis management & PR</strong>. Additional costs for the quick elimination or avoidance of an interruption to your business are also insured.</p>
<h5>Further Examples of Damages We Insure</h5>
<ul class="liste">
<li>Damage to your own IT systems (from hacking)</li>
<li>First-party data rights claim (in particular spying on personal data)</li>
<li>Expenses for an (imminent) interruption of business (additional cost coverage)</li>
<li>Breach of trust damage (intentional damage to own IT by employees)</li>
<li>Costs for criminal defence (internet criminal legal protection)</li>
</ul>
<h5>Insurer Services</h5>
<p>The special benefit about this add-on is the assumption of your own <strong>costs</strong>, e.g. for the commissioning of:</p>
<ul class="liste">
<li>Computer forensics specialists</li>
<li>Specialised lawyers</li>
<li>Consultants to provide information to data owners</li>
<li>Professionals for PR & crisis management</li>
<li>Credit protection and monitoring services</li>
</ul>
<p>as well as the assumption of <strong>additional costs, e.g. for the use of third-party IT and computer systems.</strong></p>
<p>For this add-on an <strong>deductible of € 1,000 per damage event</strong> applies.</p>
<p>For more details, see Section <strong>6. First-Party Cyber and Data Risks Insurance (FPC)</strong>, in the insurance policy terms and conditions.</p>
</span>
<span class='visible--tablet'><p><strong>This add-on protects your business from the risk of hacking, DDoS attacks or other internet crime.</strong></p>
<p>Reimbursed/covered:<strong> </strong>for example costs for the <strong>restoration of your IT systems</strong>, the commissioning of professional <strong>computer forensics analysts</strong> or specialised <strong>lawyers</strong> (including criminal defence) as well as for <strong>crisis management & PR</strong>. Additional costs for the quick elimination or avoidance of an interruption to your business are also insured.</p>
<h5>Further Examples of Damages We Insure</h5>
<ul class="liste">
<li>Damage to your own IT systems (from hacking)</li>
<li>First-party data rights claim (in particular spying on personal data)</li>
<li>Expenses for an (imminent) interruption of business (additional cost coverage)</li>
<li>Breach of trust damage (intentional damage to own IT by employees)</li>
<li>Costs for criminal defence (internet criminal legal protection)</li>
</ul>
<h5>Insurer Services</h5>
<p>The special benefit about this add-on is the assumption of your own <strong>costs</strong>, e.g. for the commissioning of:</p>
<ul class="liste">
<li>Computer forensics specialists</li>
<li>Specialised lawyers</li>
<li>Consultants to provide information to data owners</li>
<li>Professionals for PR & crisis management</li>
<li>Credit protection and monitoring services</li>
</ul>
<p>as well as the assumption of <strong>additional costs, e.g. for the use of third-party IT and computer systems.</strong></p>
<p>For this add-on an <strong>deductible of € 1,000 per damage event</strong> applies.</p>
<p>For more details, see Section <strong>6. First-Party Cyber and Data Risks Insurance (FPC)</strong>, in the insurance policy terms and conditions.</p>
</span>
<span class='visible--mobile'><p>Protection against hacking damage to your own IT systems, DDoS attacks, computer misuse, theft of data carriers and other data rights violations and the majority of the resulting expenses and costs.</p>
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Add-on: AI-Related First-Party Losses (ARL)
<h5>What is covered?</h5>
<p>The policy covers <strong>first-party losses</strong> incurred by you or your company <strong>as a result of malfunctions when using AI systems</strong>, such as</p>
<ul class="list--checkmark">
<li>Incorrect, incomplete, or hallucinated results from AI tools</li>
<li>Erroneous decisions or unintended processes by AI agents and applications</li>
<li>Incorrect processing or interpretation of data by AI systems</li>
</ul>
<h5>What is reimbursed?</h5>
<p>Your <strong>additional costs</strong> for remedying the damage are reimbursed, including, for example:</p>
<ul class="list--checkmark">
<li>Analysis and correction of AI errors (e.g., root cause analysis, rollback, deactivation)</li>
<li>Restoration, cleanup, or recreation of corrupted data</li>
<li>Additional personnel costs (e.g., overtime or replacement staff)</li>
<li>Manual post-processing and temporary solutions to maintain operations</li>
<li>Costs for external service providers, consultants, or experts</li>
</ul>
<h5>Important Limitations</h5>
<ul class="list--checkmark">
<li>No coverage for loss of revenue</li>
<li>No coverage for further development or new AI functions</li>
</ul>
<p>The compensation limit is € 50,000 per insured event and insurance year; the deductible is € 1,000.</p>
<p>For more details, see <strong>Section A.7, AI-Related First-Party Losses (ARL)</strong>, in the insurance policy terms and conditions.</p>
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Add-on: Engineering Activities (ENG)
<h5>What is covered?</h5>
<p>These activities are insured under an open-ended occupational coverage policy, specifically:</p>
<ul class="liste">
<li>Development of hardware and software in mechanical and plant engineering (including embedded software)</li>
<li>Programming of control, automation, CNC, and PLC applications</li>
<li>Design, technical drafting, and CAD/CAM services</li>
<li>Prototyping, testing, simulations, and commissioning</li>
<li>Robotics applications and engineering services, e.g., in the field of renewable energy or regulated environments (e.g., pharmaceutical, biotech)</li>
</ul>
<p>Certain types of <strong>property damage</strong> are also covered if they result directly from your engineering services.</p>
<h5>Scope of the Additional Coverage Module</h5>
<p>Coverage for clearly defined technical units, such as software modules, control logic, or interfaces that can be tested independently, including assistance with integration into an overall system.</p>
<h5>Important Limitations</h5>
<ul class="liste">
<li>No assumption of <strong>overall responsibility</strong> for complete systems</li>
<li>No coverage for damage occurring <strong>during ongoing operation</strong> or <strong>after acceptance</strong></li>
<li>No coverage for <strong>production downtime</strong></li>
<li><strong>No liability </strong>for product characteristics <strong>during subsequent use</strong></li>
</ul>
<h5>Deductible</h5>
<p>The deductible for financial loss and property damage is the same as the deductible selected for the financial loss insurance (FLI).</p>
<p>For more details, see the insurance terms and conditions under Section<strong> A.8 Engineering Activities (ENG).</strong></p>
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