Advertising agencies with a brand or network contract asking for $3M can usually meet it with one $3M primary Professional Liability (E&O) policy, or a smaller primary plus follow-form excess.
The short answer
- A $3M requirement means $3M per claim and in total for the policy year. It is on the high end for agencies and usually comes from national brands, network agencies and regulated clients.
- It is usually built as one $3M primary policy, or a $1M or $2M primary plus a follow-form excess layer. Confirm with the client that primary plus excess meets the clause.
- $3M is rarely available online and is usually placed through a broker. Morrow can help you find it.
What does a $3M requirement mean for advertising agencies?
Professional Liability (E&O, for Errors and Omissions) covers claims that your agency's work caused a client a financial loss. Agencies often also look for media liability, which covers claims that your content infringed a copyright or, depending on the form, a trademark, invaded privacy or defamed someone. Some policies include it and some sell it separately, so check the wording. A $3M clause might read:
Illustrative contract wording
Agency shall maintain Professional Liability insurance, including media liability for infringement of copyright and trademark, invasion of privacy or publicity, and defamation, with limits of not less than $3,000,000 per claim and $3,000,000 in the aggregate. If claims-made, coverage shall continue for three (3) years after the final campaign. Required limits may be met through a combination of primary and umbrella or excess policies.
Illustrative example only. Actual contract wording varies.
- Per claim and aggregate: the most paid for one claim, and for all claims in the year. A $1M/$3M policy would not meet this clause.
- Claims-made: the policy covers claims made and reported while it is active, for work after the retroactive date (the earliest work date it covers).
- "Umbrella or excess": a commercial umbrella almost never covers Professional Liability, so plan on follow-form excess Professional Liability instead.
- After the campaign: ask to keep every layer renewed with the same retroactive date where the market allows, because ads can draw late claims.
Who asks advertising agencies for $3M?
National brands, network agencies and regulated clients most often ask for $3M. Many contracts stop at $1M or $2M. $3M comes up when the client's budget or legal risk is large:
- National brands that use one master services agreement (MSA) for every agency.
- Network agencies passing their own client's limits down to the shops they hire.
- Pharma, healthcare, finance and alcohol brands, where ad claims get close review.
- Clients that hand you large media budgets, such as buying ad space by software (programmatic buying).
How is $3M built?
A primary policy pays first. An excess policy pays after the primary limit is used up. "$1M xs $2M" means $1M above the first $2M.
Example A: single policy
Example B: two layers
Example C: two layers
The excess should follow form, meaning it uses the same terms as the primary. For agencies, the media liability in the primary should carry through every layer, with the same policy period. Many Professional Liability policies pay defense costs inside the limit, so a long copyright fight can shrink what is left to settle. Agencies that mainly build ad tech may need Technology E&O instead (see $3M for technology and media firms).
Good to know
Hypothetical claims. A tagline your team wrote runs in a national launch, and another company says it infringes its trademark. A stock photo keeps running after its license ends. Coverage depends on the policy wording.
What will underwriters ask for?
An underwriter is the carrier's reviewer who decides whether to offer coverage and on what terms.
- Revenue by service (creative, media buying, production) and media spend you manage.
- Your clearance process (how you check ads before they run): legal review, trademark searches on taglines and sign-off.
- How you license music, images and talent, and track end dates.
- Use of AI tools to create content, and how you check it.
- Your largest clients and the MSA asking for $3M, including any indemnity (a promise to pay the client's losses) you agreed to.
- Three to five years of loss runs (a report listing past claims) and your current policy.
What affects the cost?
- Services and clients. National campaigns and regulated clients often cost more.
- How the $3M is built. The primary layer often costs the most per $1M of limit, and excess layers may cost less per $1M, but this varies.
- Media liability scope. Broader copyright, trademark and privacy coverage often adds cost.
- Claims history and controls. Past claims raise price.
- Retention and defense terms. A retention works like a deductible, and a higher one usually lowers premium. Defense outside the limit usually costs more.
Frequently asked questions
How do I get $3M if I carry $1M or $2M now?
Request new quotes through Morrow, either a new $3M primary or excess layers above a primary. Morrow can ask carriers to keep your retroactive date and cover earlier work (prior acts) where the market allows (see retroactive dates). Report any known incident to your current carrier before you switch.
Can the brand be added as an additional insured on my $3M policy?
Usually not, but it varies. An additional insured is someone added to your policy as a covered party. Some carriers may allow it in limited cases tied to your work. A certificate of insurance (a one-page proof of coverage) alone does not add anyone. A brand may ask for a certificate that lists every layer, with each policy number, limit and policy period.
Does $3M cover my promise in the MSA to defend the brand?
Not always. Policies often limit contract promises that go beyond your normal legal duty, such as agreeing to defend the brand against any ad claim. Morrow can review that wording against your quotes.
Looking for $3M in Professional Liability? Morrow can help.
Send us the insurance requirement from the brand's agreement and your current policy. Morrow can review both and request quotes for a $3M primary policy or primary plus follow-form excess, keeping your retroactive date where the market allows.
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This article is general information, not legal advice or a coverage determination. Coverage depends on the actual policy wording, carrier underwriting and your contract terms.