What is copyright infringement in insurance coverage?
Copyright refers to the rights authors or content creators have to reproduce their original work and grant others usage rights to their work. Most content has copyright protection. Don’t use someone else’s content for your business advertising without permission from the copyright holder.
When we talk about copyright infringement in insurance, it refers to coverage that’s part of a general liability insurance policy for unauthorized use of third-party content in advertising.
For small business owners, copyright infringement in advertising can happen when:
- Using another company’s slogan in your advertising.
- Using a photo found online in your marketing materials.
- Using a logo in your advertisement that is a copy of another company’s logo.
If a copyright owner discovers your violation, they may have their attorney send a cease-and-desist letter. You should take such a demand very seriously. If you’re lucky, deleting the infringing material might be the end of it.
But if a copyright holder comes after your small business for infringement, it could activate the personal and advertising injury coverage in your general liability insurance.
- Personal injury refers to libel, slander, defamation or violating someone’s privacy.
- Advertising injury is when a small business copies a third party’s advertising ideas or style of advertising or misuses copyrighted material.
For coverage, an insurance company usually requires that the infringement occurs within the context of advertising.
If your insurer determines that the copyright infringement falls under the advertising injury section of your policy, it may cover your attorney fees, court costs and settlements or judgments you must pay to the copyright owner.
Note: If you have general liability insurance in addition to professional liability insurance or errors and omissions insurance, you would file copyright infringement claims against your general liability coverage.
What copyright infringement isn’t covered by insurance?
Copyright law does not protect facts, ideas, business procedures, product names or inventions.
In addition, your general liability insurance policy will typically not cover advertising injury claims in the following cases:
- You knowingly published false information.
- The alleged copyright infringement took place before your policy’s effective date.
- The advertising injury resulted from a wilfully criminal or fraudulent act.
- Your ad describes your product or service incorrectly.
How can a small business avoid copyright lawsuits?
Always assume that words or images you see on the internet are subject to copyright, even if you don’t see a copyright notice or symbol.
Secure permission or purchase a license before using copyrighted content. This will usually involve contacting the owner to explain your proposed use.
And if you do use copyrighted content with permission, give proper credit to the author, artist or creator every time. Also, understand and comply with the exact permissions granted — for example, you may find that using an image in a blog post is fine, but sharing it on social media is prohibited.
