Internet Companies: Personal and Advertising Injury Surfing for Answers to Coverage Questions TLT011 Speaker: Robert Williams, Complex Casualty Claims Leader Wells Fargo Insurance
Learning Objectives At the end of this session, you will: Understand the basics of Personal and Advertising Injury ( PI and AI ) coverage under the CGL Understand the limited nature and extent of such coverage for intellectual property exposures and for insureds that have an internet presence Understand the basics of a Media Liability coverage and how it addresses the gaps in Personal and Advertising Injury coverage under the CGL for certain exposures and insureds
Elements of Coverage of PI and AI in the CGL Coverage B of the ISO CGL form Separate insuring agreement from coverages A (BI and PD) and C (medpay) Separate exclusions Applies to PI and AI caused by an enumerated offense The offenses are listed in the definition of Personal and Advertising Injury No requirement of an accident or an occurrence Arising out of the insured s business Committed in the coverage territory For PI and AI, defined to include worldwide offenses committed through the internet or similar electronic communication During the policy period
Personal and Advertising Injury Defined False arrest, detention and imprisonment Malicious prosecution Wrongful eviction, entry, or invasion of the right of private occupancy of a room, dwelling or premises, by or on behalf of the owner, landlord, or lessor Oral or written publication, in any manner, that slanders or libels a person or organization or disparages a person s or organization s goods, products, or services Oral or written publication, in any manner, that violates a person s right of privacy The use of another s advertising idea in your advertisement Infringing upon another s copyright, trade dress or slogan in your advertisement
Advertisement Defined A notice that is broadcast to the general public or specific market segments about your goods, products or services for the purpose of attracting customers or supporters This includes material placed on the internet or on similar electronic means of communication Only that part of a website that is about your goods, products or services for the purposes of attracting customers or supporters is considered an advertisement Note: state laws differ on whether widespread distribution is required or whether a limited distribution to a targeted group can be an advertisement
Exclusion for Media and Internet Type Businesses Exclusion j. Insureds in Media and Internet Type Businesses excludes PI and AI committed by an insured whose business is: Advertising, broadcasting, publishing, or telecasting Designing or determining content of websites for others An internet search, access, content or service provider The placing of frames, borders or links, or advertising, for the insured or for others anywhere on the Internet, is not by itself considered the business of advertising, broadcasting, publishing or telecasting
What is a Media and Internet Type Business First two prongs of the definition: Advertising, broadcasting, publishing, or telecasting the intent is to exclude coverage of traditional media exposures and injuries, so these businesses need and should be purchasing Media Liability insurance But, advertising for one s own business is not the business of advertising, even if done on a website over the internet Designing or determining content of websites for others This targets the business of website design and development
What is a Media and Internet Type Business Third prong of the definition: An internet search, access, content or service provider providers of online news, education, entertainment, commercial, social, and information content such as Yelp, YouTube, Pandora, NY Times, MSNBC, Disney, Zillow, MarketWatch, FaceBook, LinkedIn search providers like Yahoo, Bing, Google access ISPs providing dial-up, ISDN, DSL or satellite internet access like AT&T, Comcast hosting ISPs providing email, web-hosting or online storage services like Yahoo!mail, Hotmail, Gmail, or Amazon Web Services
Media and Internet Type Businesses Does a company that has a website have any coverage for AI or PI under the CGL? For any business, even a Media and Internet-Type Business as defined in the CGL, there is coverage for the first 3 PI offenses: false arrest, malicious prosecution, or wrongful eviction/invasion of right of occupancy For a Media and Internet Type Business, there is no AI coverage, and no PI coverage for the offenses of slander/libel/ disparagement and violation of rights or privacy
Other PI and AI Exclusions Exclusion i. The IP Exclusion Infringement of Copyright, Patent, Trademark or Trade Secret Excludes AI or PI arising out of the infringement of copyright, trademark, trade secret or other IP rights This exclusion restricts AI coverage to infringement of limited IP rights (only copyright, trade dress, or slogan) and only if committed in the insured s advertisement Copyright protects artistic works of authorship from improper use Trade dress relates to similarities in product packaging Slogans are attention getting phrases If a trademark action does not allege the infringement or misuse of a slogan or trade dress (as opposed to a trademark generally), there will be no coverage
Other PI and AI Exclusions Exclusion l. Unauthorized Use of Another s Name or Product in an email address, domain name, or metatag, or similar tactics to mislead another s potential customers Metatag is a tag in HTML at the top of a web page that provides keywords for use by search engines Exclusion e. Contractual Liability, AI or PI for which the insured has assumed liability in a contract (i.e., an indemnity) Exclusion f. Breach of Contract, AI or PI arising out of breach of contract Exclusion a. Knowing Violation of Rights of Another Exclusion b. Material Published with Knowledge of Falsity
Media Liability Coverage for Certain Business Activities Producing, publishing or distributing books, flyers, whitepapers, pamphlets, advisories, or other communication to clients or public Contracts with customers or vendors that require media liability coverage The business website goes beyond product selection and payment, such as company-sponsored social media, podcasts, webinars, reviews of products, etc. Any potential for IP infringement that is beyond the CGL definition of Advertising Advertisement includes only those parts of a website that are about goods, products, or services and that serve the purpose of attracting customers or supporters Other parts of the website that infringe will not be covered by the CGL
Other Advantages of Media Liability Coverage Carve-backs to the breach of contract exclusion for: liability assumed under contract (indemnity obligations), including IP infringement breach of confidentiality breach of express or implied contract regarding submission coverage Worldwide coverage territory Final adjudication language for knowledge based exclusions Coverage of IP infringement even if unrelated to advertising Coverage of unfair competition if related to infringement of copyright, title, slogan, trademark, trade dress, infringement of domain name, deep-linking or framing, plagiarization, piracy or misappropriate of ideas, disparagement of product, character or reputation
Summary Taken together, the exclusions of CGL Coverage B significantly restrict coverage for PI and AI, particularly for certain insureds and certain activities The CGL is not intended to cover PI or AI committed by any company whose internet presence goes beyond retail product selection and payment The CGL is not intended to cover most IP infringement, PI or AI related to contractual liabilities, representations related to goods, or knowing conduct If you currently have a claim, do not overlook the potential for CGL coverage Consider Media Liability coverage as part of a comprehensive risk management program
Questions? Thank you!