Who pays when a social media agency makes a mistake?

Key takeaways

When a social media agency makes a mistake, who pays depends on the contract's liability clause, whether the agency followed your approval, and the type of loss. Most contracts cap liability, often at fees paid. Ask whether the agency holds professional indemnity insurance, and keep a written approval step, because approving a post can shift responsibility to you.

• The contract's liability clause decides most cases.
• Liability is often capped at fees paid.
• Ask about professional indemnity insurance.
• Approving a post can make the mistake yours.

What kinds of mistakes cost money?

Common costly mistakes are using an image without a licence, a wrong price or offer in an advert, an ad budget set too high, a post that defames someone, a data breach from shared logins and missing an advertising rule. Each has a different cost and a different route to fixing it.

• Social media agency pricing in the UK
• Social media agency contract terms to check

Who pays for an agency's mistake?

If the agency breached the contract or failed to use reasonable care, it may be liable, up to any cap in the contract. If you approved the content, responsibility may sit with you. For advertising rules and data protection, the business is usually responsible to regulators, whoever made the error.

• Agency error, no approval: often the agency, up to the cap.
• Approved by you: often shared or yours.
• Regulators: usually hold the business responsible.
• Insurance: may cover the agency's share.

• Who owns the content your social media agency makes?

What insurance should an agency have?

Professional indemnity insurance covers claims that the agency's advice or work caused a client loss. Ask whether the agency holds it and at what level. For agencies handling your customer data, also ask about cyber cover and the data processing contract required under UK GDPR.

When is chasing the agency not worth it?

For small errors fixed quickly, such as a typo or a wrong link corrected within the hour, a claim costs more than it recovers. Agree a fix and a process change instead. Save formal claims for real financial loss with clear evidence.

What does this look like in practice?

A pattern we see: an advert runs with last season's price, and both sides argue about who approved it. A simple approval log, recording who said yes and when, usually settles responsibility before it becomes a dispute.

• See client work
• Social Media Marketing for UK businesses

Liability checklist

• Read the liability cap and exclusions.
• Ask about professional indemnity insurance.
• Keep a written approval log.
• Sign a data processing contract.
• Agree how errors are reported and fixed.

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Next step

Find the liability clause in your agency contract. If you cannot, or there is none, ask for one in writing.