(April 2013)
COVERAGE B–PERSONAL AND ADVERTISING INJURY
LIABILITY
1. Insuring Agreement
a. The insurance company agrees to pay amounts the
insured is legally obligated to pay as damages because of personal and
advertising injury that this insurance covers. It also has the right and duty
to defend the insured against any suit that seeks those damages but only those
suits that seek damages that this insurance covers. The company can investigate
any loss or offense and settle any resulting claim or suit at its discretion
but the amount paid as damages is limited as described under Section III–Limits
of Insurance. Its right and duty to defend ends when it uses up the limit of
insurance that applies to pay judgments and settlements under Coverage A or
Coverage B or medical expenses under Coverage C. The insurance company does not
have any other obligation or liability to pay sums or perform acts or services
other than those specifically listed and described under Supplementary
Payments–Coverages A and B.
b. This coverage applies to personal and
advertising injury caused by an offense that arises out of the named insured's
business. The offense must be committed in the coverage territory and during
the policy period.
2. Exclusions
The insurance coverage provided does not apply to any of the following,
except as noted:
a. Knowing Violation of
Rights of Another
The insurance company
does not pay for personal and advertising injury that the insured causes or
directs. This exclusion applies only if the insured knew that the act would
violate the rights of another and result in personal and advertising injury.
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Example: Roger Reporter for Shady and Sneaky Sports
Tabloid shadows a famous athlete to get a story. The athlete obtains a
restraining order against him but Shady forces Roger to get the story,
regardless of the consequences. Shady is not covered if the athlete decides
to sue it for violating the restraining order.
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b. Material Published
With Knowledge of Falsity (04 13 change)
Coverage does not apply when personal and advertising injury is caused by
material published by the insured or at its direction and the insured knew the
information was false. The publication can be either oral or written. This
exclusion applies regardless of the way the material is published. (04 13
addition)
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Example: An article in the
Whoville Gazette discloses that a famous politician's son was arrested for drunk
driving. Whoville knew it was only a traffic stop that did not even result in
a ticket or citation when it published the article. Coverage does not apply
if the politician’s son decides to sue the newspaper. This exclusion applies
even if the accusation was made on a blog, a website, on the radio, or in any
other way.
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c. Material Published
Prior to Policy Period (04 13 change)
There is no coverage for personal and advertising injury when the
material that caused the alleged injury was first published before the coverage
inception date. The publication can be either oral or written. This exclusion
applies regardless of the way the material is published. (04 13 addition)
Note: This exclusion does not
specify the party that does the initial publication. The insured may publish
the material during the policy period, but there is no coverage if the
insurance company discovers that the material was published elsewhere prior to
the policy period.
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Example: CGL coverage is
effective 01/01/13. The official date of a publication is 01/02/13 but an advance copy
was released on 12/28/12. Since the first publication took place before the
01/01/13 effective date, there is no coverage if a suit is filed that seeks
damages for personal and advertising injury. This applies even if the
publication was a reading the author provided on a radio talk show on a publicity
tour prior to the actual publication.
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d. Criminal Acts
Insurance does not apply to personal and
advertising injury that arises out of a criminal act committed by the insured
or at its direction.
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Example: Norm Newsworthy fails
to obtain details
of an incident for a story. The Newtown Daily News tells Norm to break into a
building and copy the confidential files that contain the information needed.
There is no coverage if the break-in is discovered and the newspaper is sued.
However, if Norm breaks in without Newtown's knowledge, coverage applies to
Newtown but not to Norm.
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e. Contractual
Liability
There is no coverage for liability the insured
assumes in a contract or agreement. There is one exception. This exclusion does
not apply to liability the insured has without a contract or agreement.
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Example: A celebrity agrees to an interview that The
Tattler Tabloid will publish. However, the celebrity insists on a written
agreement that states that The Tattler will not slander or libel the
celebrity. This liability exists whether it is written into the agreement or
not.
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f. Breach of Contract
Coverage does not apply to personal and advertising injury that arises
out of breach of contract. There is an exception. Coverage applies if the
contract was an implied contact and the injury is related to an advertising
idea of another used in the named insured's advertisement.
Note: An implied contract is
much different than a written one. As a result, it is more difficult to prove
that a breach occurred in an implied contract.
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Example: Johnny-On-The-Spot
Printing contracts
to design, print, and mail a promotional brochure for Brad's Bowling Bonanza.
The project is date sensitive. Johnny drops the ball and misses the mailing
date by several days. Brad sues for breach of contract. There is no coverage.
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g. Quality or Performance of Goods–Failure to Conform to
Statements
Personal and advertising injury that arises when goods, products, or
services fail to meet the named insured's advertised statements of quality or
performance is excluded.
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Example: Dolly Weighsalot sues because the
weight loss product guaranteed weight loss but Dolly gained weight instead.
Coverage does not apply in this case.
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h. Wrong Description of Prices
The insurance company does not pay for personal and advertising injury
when the named insured’s advertisement states the incorrect price for goods,
products, or services.
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Example: A newspaper subscriber sues the paper for its
lost revenue because the paper incorrectly placed the decimal point in the
sale price of a product in an advertisement. This loss is excluded.
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i. Infringement of
Copyright, Patent, Trademark, or Trade Secret
Coverage does not apply to personal and
advertising injury that arises out of any infringement of copyright, patent,
trademark, trade secret, or any other intellectual property rights.
Note: There is no requirement that the named insured, an insured, or even
someone acting on behalf of either does the infringing. All infringement is
excluded.
There are two exceptions. This exclusion does
not apply:
- When the named
insured's advertisement infringes on copyright, trade dress, or slogan
- When use of another’s advertising idea in
the named insured’s advertisement is considered infringement of
intellectual property rights
Related Court Case: Insurer Is
Obligated To Defend Copyright Infringement Claim
j. Insureds in Media
and Internet Type Businesses
There is no coverage for personal and
advertising injury committed by an insured in the businesses of advertising,
broadcasting, publishing, or telecasting. There is also no coverage if the
insured’s business designs or determines website content for others, or
provides Internet search, access, content, or service.
There is an exception. This exclusion does
not apply to the sections of the definition of personal and advertising injury
that address false arrest, detention or imprisonment, malicious prosecution, or
wrongful eviction, entry, or invasion of private occupancy.
This coverage form explains that placing
frames, borders or links, or advertising on the Internet is not considered
being in the business of advertising, broadcasting, publishing, or telecasting,
even if the placement is provided to others.
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Example: Poe's Publishing owns the building it occupies and also rents one floor
of it as apartments. Coverage applies if Poe's allegedly wrongfully evicts a
tenant from the building.
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k. Electronic Chatrooms
or Bulletin Boards
Personal and advertising injury that arises out of an electronic chatroom
or bulletin board the insured owns, hosts, or controls is excluded.
Note: It is important to note that coverage applies for personal and
advertising injury related to posting on chatrooms and bulletin boards as long
as the insured did not control, host, or own them.
l. Unauthorized Use of Another's Name or Products
The insurance company does not pay for
personal and advertising injury that arises when the named insured uses the
Internet to try to mislead another’s customers or potential customers. This
exclusion applies when the misleading is caused by unauthorized use of the name
or product of another party in the named insured's email address, domain or
metatag.
m. Pollution
Coverage does not apply to personal and advertising injury that arises
out of the actual, alleged, or threatened discharge, dispersal, seepage,
migration, release, or escape of pollutants at any time.
Note: This is an absolute exclusion. It does not have any exceptions.
n. Pollution Related
Coverage does not apply to any loss, cost, or
expense that arises out of:
- Any request,
demand, order, or statutory or regulatory requirement that any insured or
others test for, clean up, treat, respond to, or assess the effects of
pollutants in any way
- Any claim or suit
by or on behalf of a governmental authority because of testing for,
cleaning up, treating, responding to, or assessing the effects of
pollutants in any way
Note: There have been numerous attempts to cover various types of pollution
losses because of the personal injury liability coverage wording in previous
editions. These attempts were disguised as trespass, wrongful entry, or
invasion of the right of private occupancy. Personal and advertising injury
coverage was never intended to pay for any pollution damages or cleanup costs.
This exclusion clarifies that there is no coverage for any pollution exposure
that may arise out of this coverage form’s personal and advertising injury
wording.
o. War
There is no coverage for bodily injury or
property damage caused directly or indirectly in any way by war, undeclared
war, and civil war, including warlike action by a military force. This
exclusion also applies to actions a government takes to prevent or defend
against an expected or actual attack by any government or other authority that
uses military personnel or agents. It also applies to rebellion, revolution,
insurrection, or unlawful seizure of power, and the action the government takes
to prevent or defend against any of these.
p. Recording and Distribution of Material or Information
in Violation of Law (04 13 change)
The 04 13 edition retitles this exclusion by adding the words
“Recording and” preceding the rest of the title. The change in this exclusion
incorporates CG 00 68–Recording and Distribution of Material or Information in
Violation of Law Exclusion that was previously a mandatory endorsement.
Insurance coverage does not apply to personal
and advertising injury that arises directly or indirectly out of any act or
omission that violates or allegedly violates:
- The Telephone
Consumer Protection Act (TCPA), including its amendments or additions
- The CAN-SPAM Act of
2003, including its amendments or additions
- The Fair Credit Reporting Act (FRCA). This
includes any and all of its amendments plus related acts such as the Fair
and Accurate Credit Transactions Act (FACTA) (04 13 change)
- Any other statute,
ordinance or regulation that prohibits or limits sending, transmitting,
communicating, printing, disseminating, disposing of, transmitting,
or distributing material or information. (04 13 change)
Note: This exclusion does not state
that the named insured or even an insured must be the violator. As a result,
situations could arise where an insured or the named insured is not aware that
its computers have been hacked to violate the act and coverage still does not
apply.
Related Court Case: Commercial Liability Policy Obligated To
Respond To TCPA Violations
SECTION V–DEFINITIONS
Defined words are used throughout the coverage form. Restricting their
meaning to the definition in the coverage form gives all parties a clearer
understanding of the coverage intended. Twenty-two terms are defined.
14. Personal and
Advertising Injury
This is any injury that
arises out of one or more of the following offenses.
a. False arrest, detention or imprisonment
b. Malicious prosecution
c. When an owner, landlord, or lessor of a premises
wrongfully evicts, enters, or invades the rights of a person who occupies that
premises. The owner, landlord, or lessor may actually commit the wrongful
act(s) or someone who acts on behalf of the owner, landlord, or lessor may
commit them.
d. Any oral or written publication of material that
slanders or libels a person or organization or disparages a person's or
organization's goods, products, or services. This can take place using any form
of communication, including the Internet and other electronic forms.
e. Oral or written publication of material that violates a
person's right of privacy. The violation can take place using any form of
communication, including the Internet and other electronic forms.
f. The named insured using another party’s advertising idea
in its advertisement
g. The named insured's advertisement that infringes on
another party’s copyright, trade dress, or slogan
