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Principles of Advertising Injury Coverage

Standard Commercial General Liability ("CGL") policy forms provide coverage for advertising injury liability. Advertising injury is typically defined to comprise certain offenses, such as defamation, invasion of privacy, "misappropriation of advertising ideas or style of doing business," and "infringement of copyright, title, or slogan." This coverage became standard in 1986; before this date, advertising injury liability coverage was offered by a separate broad form endorsement for which an additional premium was charged.
 
Once an insured tenders the required notice of a claim, an insurer might deny defense and indemnity for the advertising injury liability on various grounds. The most common are because: (1) the underlying claim does not fall within an offense enumerated in the policy's definition of "advertising injury;" (2) the insured did not engage in advertising activities within the scope of the policy; or (3) there is an insufficient nexus exists between the injury complained of and the policyholder's advertising activities.
 
II. Requirements For Coverage
 
The insured must fulfill three elements in order to establish coverage: (1) the insured must have engaged in "advertising activity"; (2) the underlying action must fit into one of the enumerated offenses of "advertising injury"; and (3) the "advertising injury" to the underlying plaintiff must have arisen solely out of the insured's "advertising activities." In turn, the insurer would have the burden with respect to any policy exclusions.
 
If you have a subscription to lexis.com, you can read the entire article at 12-16 Mealey's Emerg. Ins. Disps. 17 (2007).
 
Scott P. DeVries is a partner in Winston & Strawn and specializes in insurance coverage and other complex civil litigation. Yelitza V. Dunham is an Associate.