Why sports organizations need this coverage
Personal/Advertising Injury coverage under a General Liability policy for sports and recreation sanctioning/governing associations does not receive the attention it deserves. This is because the primary loss exposure arises from bodily injury or property damage. However, it is surprising how often associations are sued when Personal/Advertising injury is claimed.
Personal/Advertising Injury applies to certain lawsuits alleging slander, libel, or disparagement of a person’s or organization’s goods, products, or services, and invasion of privacy, false arrest or imprisonment, malicious prosecution, wrongful eviction, the use of another’s advertising idea in your advertisement, or infringement of a copyright, trademark, or slogan in your advertisement.
The definition of advertisement is “a notice that is broadcast or published to the general public or specific market segments about your goods, products, or services for the purpose of attracting customers or supporters. Notices that are published include material placed on the Internet or similar means of electronic communication. Regarding websites, 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.
What’s not covered
Some notable exclusions include Personal/Advertising Injury from knowing violation of the rights of another, knowing oral or written publication of false material, criminal acts, assumption of liability normally belonging to another under a contract, breach of contract, failure of goods or services to conform with statement of quality or performance in your advertisement, wrong pricing description, and infringement of copyright, patent, trademark, or trade secret or other intellectual property.
Below are common situations that arise in the sports and recreation context that may be covered by Personal/Advertising Injury:
- A slanderous statement made about a coach, umpire, or parent in the heat of competition.
- Criminal background check results are not kept confidential.
- Promotional materials for the sports organization, such as photos or videos, include the image of a member without permission.
- Publication of normal member-related newsletters, magazines, or website content for the purpose of promoting member services (falls under definition of “advertisement”).
The following activities are not likely to be covered under Personal/Advertising Injury due to the above-mentioned exclusions:
- All trademark and trade secret claims
- Copyright, trade dress, or slogan claims unless they arise out of your advertisement
- Providing open forum blogs, chat rooms, electronic bulletin boards where users can post potentially libelous comments.
- Advertising, broadcasting, publishing, telecasting, and designing websites on behalf of others that goes beyond normal membership services.
- Publishing material that is not part of the sports organization advertisement that infringes upon the copyright or trademark of others.
- Engaging in search engine optimization (SEO) techniques based on the use of competitor names or similar names in metatags or domain names.
The need for Cyber Liability and/or Media Liability Insurance
Due to the Personal/Advertising Injury exclusions listed above, sports and recreation organizations with operations that may fall under these excluded areas should seriously consider purchasing Cyber Liability and/or Media Liability insurance.
In addition, some of the broader Directors & Officers Liability policies may include coverage for personal injury and publisher liability. One particular policy form offered by the Chubb Group of Insurance Companies defines publisher liability as infringement of copyright or trademark, unauthorized use of title, plagiarism or misappropriation of ideas. This is important protection because Directors & Officers policies provide the coverage grant of personal injury and publisher liability without most of the exclusions that are found under the General Liability policy. Of course, the addition of these enhancements under a Directors & Officers policy are not as broad as the coverages that can be obtained under a good Media Liability or Cyber Liability policy form.
For more information on how to cover Personal/Advertising Injury exposures under a Cyber Liability policy, contact Sadler Sports & Recreation Insurance at 800-622-7370.