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Do CGL Insurance Policies Cover Copyright Infringement Claims?

In the digital age, intellectual property holders have become increasingly aggressive in litigating against anyone believed to have unlawfully used copyrighted material. If you are engaged in any activities that could possibly be viewed as infringement, you need to be sure that your commercial general liability insurance policy provides adequate coverage. That, in turn, depends on the language of your specific CGL policy.

The issue of whether CGL policies should cover intellectual property claims has evolved greatly over the past few decades. Copyright infringement had long been considered an “advertising injury” and insurance companies were required to cover policyholders who were accused of stealing ideas or infringing copyrights in their advertising. That started changing when internet communication became the norm, overtaking print media. The internet made it easier for one party to find and use someone else’s material, so the number of infringement claims skyrocketed, resulting in higher defense costs and claim payouts for insurance companies. In response, insurers began changing their CGL policy language to exclude or limit coverage for copyright claims.

Today, many CGL policies still contain language saying that the policyholder is covered for advertising injuries, including copyright infringement. However, the circumstances under which these policy provisions apply have been narrowed significantly. Generally, CGL policies will require the insurer to cover the policyholder in copyright litigation only if all three of the following are true:

  • The plaintiff alleges an advertising injury that is specifically enumerated in the policy
  • The advertising activity caused injury to the plaintiff
  • The policyholder was engaged in advertising when the alleged injury occurred

These three parts of an infringement claim depend entirely on the facts of the specific case, which makes it very difficult to definitively conclude in advance that the CGL policy language is sufficient. Because CGL coverage for intellectual property infringement has been steadily eroded over time, your business may want to consider purchasing IP insurance that is designed specifically to cover you if you are accused of infringing on someone else’s copyright.

The business lawyers of Hemmer DeFrank Wessels PLLC can analyze your CGL policy to determine whether it adequately protects you against copyright infringement claims. If you have already been accused of infringement, we are here to help you through the legal process. Please call our Fort Mitchell office at [ln::phone] or contact us online to schedule a virtual meeting or telephone consultation.