Vondran Legal® Photo Infringement Insights - Check your insurance for coverage against Plaintiff lawyers.
By Attorney Steve® | Vondran Legal
Every week I receive calls from businesses, website owners, marketing agencies, online retailers, and entrepreneurs who have received a copyright demand letter over the alleged use of a photograph on a website.
The numbers can be shocking.
Some demand letters seek $5,000 to $10,000.
Others demand $25,000, $50,000, or more.
Recently, I reviewed a matter where the claimed damages exceeded $700,000 for alleged photo infringement.
Many business owners immediately begin negotiating, or worse, write a check out of fear.
Before you do either, there is one critical question you should ask:
Do you have insurance coverage?
It may surprise you to learn that many Commercial General Liability ("CGL") policies contain coverage for what is commonly known as "advertising injury." In the right circumstances, your insurer may have a duty to defend you and, in some cases, pay all or part of a settlement or judgment.
This issue is often overlooked.
What Is "Advertising Injury"?
Most businesses carry some form of Commercial General Liability insurance.
These policies typically provide coverage for bodily injury and property damage, but many also include coverage for certain business torts arising out of advertising activities.
Historically, CGL policies have covered various forms of "personal and advertising injury," including claims involving:
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Copyright infringement
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Trade dress infringement
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Slogan infringement
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Defamation
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Libel and slander
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Misappropriation of advertising ideas
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Certain privacy claims
While policy language varies significantly from carrier to carrier, many copyright claims involving website advertising or marketing activities deserve a careful insurance analysis.
The Ninth Circuit Recognized Coverage
One important case businesses should know about is:
J.I.P., Inc. v. Reliance Insurance Co., 165 F.3d 35 (9th Cir. 1998).
In that case, the Ninth Circuit examined whether certain copyright infringement allegations triggered advertising injury coverage under a CGL policy.
Although every policy and every factual situation is different, the case demonstrates an important principle:
Not every copyright infringement claim falls outside insurance coverage.
In fact, depending upon:
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the wording of the policy,
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the alleged infringement,
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how the copyrighted work was used, and
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the applicable state law,
an insurer may owe its insured a defense against the lawsuit.
And in litigation, the duty to defend is often broader than the duty to indemnify.
That distinction can be enormously valuable.
Why This Matters
Defending a federal copyright lawsuit is expensive.
Legal fees alone can quickly reach:
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$25,000
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$50,000
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$100,000
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or substantially more
If your insurance company accepts the tender, it may provide:
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defense counsel,
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payment of litigation expenses,
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settlement authority,
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indemnity coverage (depending upon the facts),
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and valuable leverage during negotiations.
Even if coverage is disputed, obtaining a coverage determination can significantly affect settlement discussions.
Website Photos Often Raise Coverage Questions
Many modern copyright claims involve photographs used on:
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business websites
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restaurant websites
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medical practices
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real estate listings
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blogs
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online stores
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law firm websites
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marketing campaigns
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social media promotions
These uses frequently relate directly to advertising or promoting a business.
That is exactly why an experienced attorney should evaluate whether the claim potentially falls within the advertising injury provisions of your insurance policy.
Time Matters: Tender the Claim Promptly
One of the biggest mistakes I see is waiting too long to notify the insurance company.
Many policies require prompt notice.
Delaying notice can create unnecessary coverage disputes.
In some situations, late notice may even provide the insurer with grounds to deny coverage if the delay prejudiced the carrier's ability to investigate or defend the claim.
Accordingly, when we receive a significant copyright demand, we often recommend that clients immediately locate:
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their Commercial General Liability policy,
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umbrella policy,
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business owner's policy (BOP),
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cyber policy,
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media liability policy (if applicable), and
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any other potentially applicable insurance.
We then evaluate whether the matter should be tendered to the insurer.
The Tender Letter
In appropriate cases, counsel may send correspondence similar to the following to opposing counsel:
Please be advised that the claims asserted may fall within "advertising injury" coverage provided under our client's Commercial General Liability policy. See J.I.P., Inc. v. Reliance Insurance Co., 165 F.3d 35 (9th Cir. 1998). Our client is evaluating insurance coverage and reserves all rights. Any demand should account for the possibility that defense and indemnity obligations may exist under applicable insurance policies.
Likewise, the insured should promptly notify its own insurance carrier of the claim and cooperate with the carrier's investigation.
Not Every Policy Provides Coverage
There are important limitations.
Many insurers have added exclusions over the years that may affect coverage, including exclusions relating to:
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intellectual property claims,
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knowing violations,
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intentional acts,
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prior publication,
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contractual liability,
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and other policy-specific limitations.
Some modern CGL policies have significantly narrowed advertising injury coverage compared to earlier policy forms.
That is why reading the actual policy language is critical.
Never assume you have coverage.
But just as importantly—
Never assume you don't.
We Recently Reviewed This Exact Issue
Our firm recently analyzed whether a business owner's State Farm Commercial General Liability policy potentially provided coverage for a copyright dispute involving photographs used on a business website.
The matter required a detailed review of:
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the declarations page,
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endorsements,
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advertising injury provisions,
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intellectual property exclusions,
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and multiple policy amendments.
These issues are highly fact-specific and often require careful legal analysis before conclusions can be reached.
Practical Steps If You Receive a Copyright Demand
If a photo licensing company, photographer, or copyright enforcement firm sends you a demand letter:
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Do not ignore it.
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Preserve all documents and communications.
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Locate all insurance policies that may apply.
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Tender the claim promptly to your insurer if appropriate.
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Consult experienced copyright counsel before admitting liability.
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Evaluate defenses, fair use issues, licensing questions, registration issues, and insurance coverage simultaneously.
Do not focus solely on the demand amount.
Insurance coverage can dramatically change the economics of the case.
Final Thoughts
Photo copyright enforcement has become increasingly aggressive. Some plaintiffs seek settlements that bear little relationship to the value of the underlying image, relying on the cost and uncertainty of federal litigation to pressure businesses into paying quickly.
Before writing a settlement check, make sure you have explored every available avenue—including your insurance coverage.
A properly tendered claim may trigger a defense obligation, provide valuable settlement leverage, or substantially reduce your out-of-pocket costs.
Every policy is different. Every claim is different. But one thing is consistent:
Checking your insurance coverage should be one of the very first steps—not the last.
Need Help Evaluating a Photo Copyright Demand?
If you have received a copyright demand letter involving website photographs, stock images, social media content, or other alleged infringement, our firm can help evaluate:
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Insurance coverage ("advertising injury")
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Copyright defenses
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Fair use
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Copyright registration issues
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Settlement negotiations
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Federal copyright litigation
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Insurance tender strategy
Before paying thousands—or even hundreds of thousands—of dollars, make sure you understand all of your legal options.
Vondran Legal®
National Copyright & Intellectual Property Counsel
📞 (877) 276-5084
Disclaimer: This article is for educational purposes only and does not constitute legal advice. Insurance coverage depends upon the specific language of the policy, applicable state law, and the facts of each case.
