Finding Appropriate Media Policy Coverage
Finding Appropriate Media Policy Coverage
By David A. Gauntlett*
Businesses beyond obvious multimedia categories, such as advertisers, producers, publishers, or others like them, may need to acquire media liability coverage to protect against the rising use of and threats associated with integrating social media and online business operations. Social media is becoming a key aspect of business operations for advertising and making virtual connections to consumers and partners which calls for more attention for the need to secure coverage of media risks. As Betterley adds, “social media risk has really caught the attention of employers, particularly as . . . employees might post harmful remarks about their employer’s customers, fellow employees, and the company itself” on social media.[1]
Media Policy Coverage
As Media coverage is often sold in conjunction with Cyber coverage, when combing through the market for Media/Cyber policies, policyholders must be aware of the policies that are offered and the broadest possible media coverage they will need. Cyber/Media policies lack policy language standardization, so policyholders need to be prepared to evaluate the coverage they need with the coverage provided within the Cyber/Media policy.
By comparing common Cyber/Media policy packages, such as (1) Chubb Westchester[2], (2) Coalition[3], (3) ERisk[4], (4), TMHCC[5], (5) Travelers[6], and (6) Cowbell, policyholders can generally find coverage for:
Media Coverage Provisions
ERisk, as best practice form, lays out under their (A) INSURING CLAUSES, (1) Liability Insuring Clauses:
a. Web-Media Services
The Insurer shall pay on behalf of the Insureds, Costs, Charges and Expenses, and Damages which the Insureds have become legally obligated to pay by reason of a Claim first made against any Insurer pursuant to Section E.1 herein, for a Web-Media Services Wrongful Act taking place on or after the Retroactive Date and prior to the end of the Policy Period.[7]
ERisk, defines[8]:
· Web-Media Services means:
a. the gathering, collection, or recording of Web-Media Material for inclusion in a Web-Media Communications; or
b. the publication, dissemination or release of Web-Media Material in any Web-Media Communication;
in the ordinary course of the Company’s business.
· Web-Media Services Wrongful Acts means:
a. disparagement or harm to the reputation, feelings or character of any natural person or entity, defamation, libel, slander, product disparagement, trade libel, negligent infliction of emotional distress, malicious falsehood, outrage or outrageous conduct;
b. invasion of or interference with the right of privacy or publically, including eavesdropping, intrusion upon selection, false light, invasion of privacy, public disclosure of private facts, breach of confidence, and misappropriation of name or likeness;
e. plagiarism, piracy, or misappropriation of ideas;
f. infringement of copyright, or the dilution or infringement or trademark, trade dress, service, mark, service name, trade name, title, slogan; or
g. negligence regarding the content of any Web-Media Communication, including harm directly resulting from reliance or failure to rely upon such content.
· Web-Media Communication means any communication of Web-Media Material through an internet or intranet website the Company owns controls, including, regardless of the nature or form of such communication.
· Web-Media Material means material of any form or nature whatsoever contained at any time on an internet or intranet website the Company owns or controls, including but not limited to, advertising, art, words, data, email communication, entertainment, film, composition, news, photographs, pictures, printed material, recordings, social media sites, video, computer coding, images, graphics and music.
It is worth noting that ERisk applies media liability coverage to terms under Web-Media Services Wrongful Acts but there is no observed standardized term used among the policies to categorize claims under media[9] illustrating a varied, and sometimes more limited scope of coverage within the definition of “media content”.[10]
Exclusions Within Media/Cyber Policy
Common exclusions found in Media/Cyber policies are:
1. Bodily Injury/Property Damage[11]
2. Fraudulent or Intentional Acts[12]
3. Breach of Contract[13]
4. Unfair Trade Practices
5. Intellectual Property[14]
There was a commonality in the exclusions of the cyber policies observed. ERisk, however, critically included no express exclusion for “breach of contract” and “unfair trade practices.”
Conclusion
Despite the complicated nature of securing appropriate media coverage, insurers are developing media policies for “everyone else.” Betterley explains that such insurers, like ERisk, are melding “IP coverage and media liability protection, offering a modular form, with coverage for media and advertising content, tech and miscellaneous E&O, and network security and privacy . . . cover[ing] IP claims such as copyright and trademark infringement and misappropriation of ideas.”[15]
Securing the broadest Cyber/Media policy is difficult due to the lack of standardized form and policy language. The policies observed have commonalities; however, upon closer evaluation, ERisk offers a best practice for media coverage in its insuring clause’s expansive scope as well as its lighter presence of policy exclusions when compared to other Cyber/Media polices. Cyber/Media policy is evolving to be more attuned to the present and emerging risks of online business operations so it is crucial to know what policy coverage is appropriate and what policy language to avoid when curating the broadest form possible.
Word Count: 1475
*David A. Gauntlett is a principal of Gauntlett & Associates and represents policyholders in insurance coverage disputes. For more information, visit Gauntlett & Associates at www.gauntlettlaw.com.
[1] Richard S. Betterley, The Betterley Report: Intellectual Property and Media Liability Insurance Markey Survey -2021, p. 5 (April 2021)
[2] Cyber Enterprise Risk Management Policy PF-48169 (10/16);
[3] Cyber Policy SP 14 798 1117 with CRC Amendatory
[4] Business and Management Indemnity Policy Cyber, Media and Technology Security Services Coverage Section EKP-17
[5] NetGuard Plus Cyber Liability Insurance NGP 1000
[6] CYBERRISK CYB-16001
[7] ERisk, at p. 1
[8] Id. at p. 10
[9] See, e.g. CHUBB: Media Incident; Coalition: Multimedia Wrongful Act; Travelers: Media Act; TMHCC: Multimedia Wrongful Act
[10] See, e.g., CHUBB, p.6 (“Media Content means any data, text, sounds, images, graphics, music, photographs, or advertisements, and shall include video, streaming content, webcasts, podcasts, blogs, online forums, and chat rooms. Media Content shall not include computer software, software technology, or the actual goods, products or services described, illustrated or displayed in such Media Content.”) But see, TMHCC, p. 14 (Offers an ambiguous scope observed under their definition of Media Material as “communicative material of any kind or nature for which as “communicative material of any kind or nature for which You are responsible, including, but not limited to, words, pictures, sounds, images, graphics, code and Data, regardless of the method or medium of communication of such material or the purpose for which the communication was intended…does not include any tangible Products.”)
[11] See, e.g., ERisk: a. alleging, based upon, arising out of, attributable to, directly or indirectly resulting from, in consequence of, or in any way involving:
i. bodily injury, sickness, disease or death of any person, mental anguish, emotional distress, mental injury, mental tension, pain or suffering or shock, or loss of consortium resulting therefrom;
ii. loss of damage to, or destruction of any tangible property or securities, including loss of use thereof.
[12] See, e.g. Cowbell: Prior Knowledge: Any: (1) Claim, Privacy Incident, Network Security Incident, Cyber
Crime Incident, Media Incident, Interrelated Incident, fact, circumstance, transaction or event which has been the subject of any written notice given under any other policy before the inception date of this Policy; (2) prior or pending litigation, regulatory or administrative proceeding or any Claim of which the Insured had knowledge or received notice prior to the inception date of this Policy or, if this Policy is a renewal of another policy issued by
the Insurer, the first such insurance policy issued to the Named Insured by the Insurer and continuously renewed until the inception date of this Policy; or (3) any matter that prior to the inception date of this Policy, or if this
Policy is a renewal of another policy issued by the Insurer, the first such insurance policy issued to the Named Insured by the Insurer and continuously renewed until the inception date of this Policy, the Insured
knew or reasonably should have known could lead to a Claim, First Party Loss, First Party Expense or Liability Expense.
[13] See, e.g., CHUBB: 11. Contract
for breach of any express, implied, actual or constructive contract, warranty, guarantee, or promise,
including any actual or alleged liability assumed by an Insured, unless such liability would have attached
to the Insured even in the absence of such contract, warranty, guarantee, or promise. However, this
exclusion shall not apply to:
a. solely with respect to Insuring Agreement E, Payment Card Loss;
b. solely with respect to Insuring Agreements A or E, an Insured’s contractual obligation to maintain the confidentiality or security of third party personal or corporate information; or
c. solely with respect to Insuring Agreement F, misappropriation of idea under implied contract.
[14] See, e.g., Travelers: Intellectual Property
The Insurer will not pay Loss based upon or arising out of an Insured's misappropriation,
infringement, or violation of:
1. copyrighted software;
2. patent rights or laws; or
3. trade secret rights or laws.
[15] Betterley Report, at p. 5