(April 2019)
SECTION
I–COVERAGES
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. The insurance company not only has the
right, but it also has the duty to defend the insured against any suit that
seeks those damages. However, this right and duty applies only for those suits
seeking damages that this insurance covers. The company can investigate any
loss or offense and settle any resulting claim or suit at its discretion. The
amounts paid as damages is limited as described under Section III–Limits of
Insurance.
The insurance company’s 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 has no 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.
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Example: Happysmile Dentists are sued by BigPayne
Dental Factory on June 6, 2019 for erecting a billboard ad that looks
remarkably like a campaign used by BigPayne. Later,
on July 2 and July 19, 2019, BigPayne files two
other suits upon discovering two other "copycat" billboard ads. Happysmile immediately sent all three notices to their
insurer. Happysmile’s policy is effective from
7/1/2018 – 7/1/2019 and its renewal is 7/1/2019-2020. Only the initial policy
will respond to the claims because all the offenses are against the same
organization and the first offense was on June 6, 2019.
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2.
Exclusions
The insurance coverage provided does
not apply to any of the following, except as noted:
a.
Knowing Violation of Rights of Another
Coverage does not apply 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: Mindy
works for Best of the East, an interior design company. Best of the East is
desperate to show its work in a major Holiday Home Show so Mindy is charged
with following various committee members to gain information that might help
influence their accepting Best of the East in the show. Mindy places wiretaps
on phones to help with her information gathering. Mindy is not covered when
the wiretaps are discovered, and members of the committee sue Best of the
East and Mindy for the wiretaps. However, if Best of the East was unaware of
Mindy’s actions, they may be covered but Mindy would not be.
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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: Archie blogs on his company’s website that
Gracie’s Pub received a failing grade from the local health department.
Archie knew this was not true, but he was angry at Gracie’s for asking him to
leave the night before. When Gracie sues the company for Archie’s blog, there
is no coverage.
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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 01/01/19. The
official date of a publication is 01/02/19 but an advance copy was released
on 12/28/18. Because the first publication took place before the 01/01/19
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 when it arises out of a criminal act committed
by the insured or at its direction.
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Example: Mindy, from our prior example, was able to prove
that she was not aware she was violating the committee members privacy, but
she is still not covered because placing wiretaps is a criminal act in her
state.
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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: Johns’
Inc. is sued because its ad is very similar to one that was developed for it
but not paid for.
Scenario 1: The ad was one of many developed under a
contract with an ad agency. It was rejected, and the relationship ended. When
it was later used as a part of an in house developed ad campaign the agency
sued because John’s had rejected the idea and the terms of its contract
prevents John’s from using such rejected ideas. No coverage applies.
Scenario 2: At a party, an ad agency representative is
talking to the president of John’s and throwing out spontaneous ideas in order
to get an appointment. The president declines to pursue the appointment but
uses one of the ideas in an in-house ad campaign. The ad agency sues because
its ideas were stolen and that breached an implied contract. Coverage does
apply.
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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: Paula
makes up flyers for her new business. She states that her specialty cherry
pies cost $2.50 instead of $25.00. Customers come to her store expecting to
receive the $2.50 pies and are disappointed when her employees explain that
the price was in error. One customer decides to sue Paula for this offense.
There is no coverage.
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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 Cases:
270_C137, Insurer Is Obligated
to Defend Copyright Infringement Claim
270_C331, Hijacking the Hobbit
270_C354, Joint Owner Alleges
Misappropriation Of Work
270_C179, Insurer and
Manufacturer Dispute Meaning Of "Advertising Injury"
j.
Insureds in Media and Internet Type Businesses
There is no coverage for
personal and advertising injury committed by an insured that is 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 rents one floor of it as apartments.
Scenario 1: Poe’s is sued for wrongfully evicting a
tenant from the building. Coverage applies.
Scenario 2: Poe’s is sued for libel in one of its
publications. Coverage does not apply.
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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 if 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 older 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: 270_C277, Commercial Liability Policy Obligated to Respond to TCPA
Violations
Not lettered. Access or Disclosure of Confidential or Personal
Information and Data-Related Liability (05 14 edition)
Note: CG 21
06–Exclusion – Access or Disclosure of Confidential or Personal Information and
Data-Related Liability – With Limited Bodily Injury Exception was introduced as
a mandatory endorsement with a 05 14 edition date. Because it is mandatory, we
are adding the wording from the CG 21 06.
Coverage does not apply when personal and advertising injury arise from
the disclosure of or access gained to confidential or personal nonpublic
information belonging to any person or organization. Examples of such
information are patents, trade secrets, customer lists, credit card
information, health information, how to process, and financial information.
There are many types of damages and this exclusion applies to all of
them even when limited to notification costs, credit monitoring expenses,
forensic expenses, public relations expenses, and similar expenses.
SECTION
V–DEFINITIONS
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
Note:
These offenses apply far beyond law enforcement activities. Impeding the
progress of a shoplifter is an example of detention and imprisonment. Not
allowing persons to leave an area, for whatever reason, is another example of
imprisonment.
b. Malicious prosecution
Note:
Repeated reports to authorities about a neighbor’s conduct can be considered
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.
Note: This
offense focuses on the relationship between the landlord and the tenant. A
landlord may believe that because he owns the property, he has the right of
access to all of it at any time and can force tenants to leave at will.
However, thanks to various state laws, tenants have protected rights of
occupancy.
d. The publication
of slandering or libeling a person or organization. Also, publication of
material disparaging a person's or organization's goods, products, or services.
The publication can be either written or oral and can take place using any form
of communication, including the Internet and other electronic forms.
e. The publication
of material that violates a person's right of privacy. The publication can be
either written or oral and can take place using any form of communication,
including the Internet and other electronic forms.
f. Another party’s
advertising idea being used in the named insured’s advertisement
g. The named
insured's advertisement that infringes on another party’s copyright, trade
dress, or slogan
