In the 2020 election cycle, U.S. presidential and congressional candidates spent nearly $14 billion, and projections for 2024 suggest total spending exceeded $16 billion. On the heels of the most expensive political campaign season on record, the next election cycle has already begun, with many politicians already eyeing reelection while newcomers are preparing to jump into midterm races. Between such significant spending and the increasingly elaborate efforts of modern political campaigns, it is safe to say such operations are more complex—and risky—than ever before.
From campaign staff facing potential bodily injury on the trail to cybercriminals targeting sensitive donor information, the range of exposures is constantly growing. To safeguard against such risks, political campaigns must secure the right insurance coverage early to mitigate these evolving risks and potential losses from the outset.
Insurance Lessons from the Campaign Trail
Past campaigns have highlighted the key role proper insurance coverage plays in stemming risks and losses that could threaten a run for office. For example, during Gerald McCann’s 2013 mayoral campaign in Jersey City, New Jersey, a class of minority voters sued McCann and his campaign staff, alleging that the defendants were engaged in a conspiracy to prevent them from voting. McCann’s campaign insurer refused to defend or indemnify the defendants for the class action lawsuit. However, the court ultimately ruled that the insurer, which had issued a general liability policy to the campaign, had a duty to defend and indemnify the defendants in the class action for claims regarding civil rights violations and intentional acts.
Many other national and local examples further illustrate the growing risks posed by campaign-related operations and underscore the importance of having proper insurance to protect against resultant losses. For example, campaigns face significant cyberthreats, as seen in Hillary Clinton’s presidential campaign when a successful hacking attempt led to the release of a cache of emails that became a widely debated topic.
Traditional campaign advertising can also have pitfalls. For example, Tim Hagan’s Ohio gubernatorial campaign created online commercials featuring a duck with then-Governor Bob Taft’s head. Insurance company Aflac, whose mascot is a duck, filed suit claiming the ads constituted trademark dilution and copyright infringement. The court ultimately found that the commercials were parodies under the First Amendment. Nevertheless, certain coverages can help cover the costs of various forms of litigation brought against political campaigns.
Insurance Coverage Options
While there are many threats specific to running for public office, campaign teams are organizations and, as such, face a similar range of risks as any enterprise with employees. To cover these risks, as well as election-specific exposures, anyone formally setting up a political campaign effort should consider the following forms of insurance coverage:
- General liability (GL) insurance protects a campaign against third-party claims and lawsuits. For example, if a campaign staffer, volunteer or attendee is injured at an event and seeks compensation, GL insurance could help cover those costs. Some GL policies also include liquor liability coverage, which protects the campaign during fundraising or other events that offer alcohol.
- Property insurance safeguards the campaign’s physical assets, including office buildings and their contents from computers and technological equipment to furniture to campaign materials like posters and signs. Additionally, property insurance protects a campaign’s financial and accounting records. For example, this type of coverage can respond if a riot or civil commotion damages a campaign’s office.
- Commercial auto insurance is necessary for campaigns that use vehicles to transport the candidate, staff and security personnel. It covers accidents involving campaign-owned vehicles, including bodily injury, medical expenses for the driver and property damage to the vehicle.
- Non-owned and hired auto insurance offers protection against damage to vehicles used for campaign operations but not owned by the campaign, such as rented, leased or staff-owned vehicles. Many campaigns rely on staffers to use their personal or leased vehicles for campaign-related events and non-owned auto insurance can protect against damage to those vehicles while staffers are driving on the campaign’s behalf.
- Directors and officers (D&O) insurance provides financial protection for campaign directors, officers, managers and other employees against lawsuits related to alleged mismanagement or errors in campaign operations. For political campaigns, D&O policies typically provide two types of coverage in a lawsuit against the campaign or its leadership: “Side A” covers the campaign’s leaders when they are named in their capacity as a campaign representative and are not reimbursed for costs and expenses related to a lawsuit for campaign-related work. “Side B” covers the campaign’s costs and expenses after it pays for losses resulting from lawsuits against the campaign’s leadership.
- Media liability insurance protects the campaign from defamation, plagiarism or copyright infringement claims resulting from ads or public statements by campaign spokespeople. This includes claims arising from the unauthorized use of music at campaign rallies. Media exposure is critical to the success of any campaign and media liability insurance helps protect against the risks associated with this exposure. Media risks can lead to misrepresentations that cause financial losses or harm to a person’s reputation.
- Cyber insurance is increasingly critical for campaigns as they store sensitive donor information. Cyber insurance can cover costs related to cyberattacks and data breaches, and some policies provide limited media liability coverage as well. As bad actors become increasingly sophisticated and campaigns rely more on collecting information from potential donors and voters through websites and online platforms, this coverage should be essential to any campaign’s strategy to protect against cyber-related liabilities.
- Crime/employee theft insurance covers losses from fraud, embezzlement, robbery, forgery and other dishonest acts by campaign employees, including expenses associated with a data breach or computer fraud.
- Event cancellation insurance protects against financial losses incurred if a campaign has to cancel, postpone or relocate an event for reasons beyond the campaign’s control. Campaign events often involve thousands of attendees at large venues. Given the sheer scale of such events, campaigns must explore ways to protect against potential losses resulting from event cancellations for unforeseen circumstances.
- Special events insurance covers individual campaign events like rallies and conventions, providing protection tailored to the specific risks associated with the event.
- Employment practices liability (EPL) insurance covers legal costs, settlements and judgments for claims related to actual or alleged employee rights violations, such as discrimination, wrongful termination and harassment.
- Workers compensation coverage covers claims related to workplace injuries and is mandatory for campaigns with paid employees.
- Bundled insurance packages combine multiple coverages to address a range of risks associated with political campaigns, streamlining protection for potential exposures.
How to Secure Coverage for Campaigns
Campaign managers should know that they may need to file a claim to recover losses and additional costs if a qualifying event occurs. To secure coverage, campaigns should:
- Review all relevant insurance policies to identify applicable coverages
- Notify insurers of the potential insurance claim as soon as possible
- Maintain thorough, up-to-date records detailing damages, costs, losses and any extra expenses, including accounting records, contemporaneous photos and videos
How insurance responds to the evolving risks of modern political campaigns depends on the structure of the campaign’s insurance program and the specific terms, conditions and exclusions in each policy. It is imperative for campaigns to carefully review all policy terms—both at the time of purchase and when filing a claim. Campaigns should consider consulting insurance coverage counsel for expert guidance to ensure comprehensive protection and maximize recovery potential.