Jurisdictions Split on Potential Coverage for Misuse of Models’ Images
By David A. Gauntlett*
Introduction
Over the past several years, a number of very similar cases have arisen in jurisdictions across the country.[1] The fact pattern in each is nearly identical. A bar or club used models’ images without permission in advertisements, and the models collectively sued to recover damages for use of their likeness. Interestingly, despite the identical fact patterns (and, in many cases, identical policy language), the coverage cases that followed have been split in their determinations.
Potential Coverage under “Personal and Advertising Injury” Offenses
The primary grounds for coverage asserted in all four cases were “personal and advertising injury” offenses “e” and “f.” The former provides coverage for “[o]ral or written publication, in any manner, of material that violates a person's right of privacy,” while the latter covers “[t]he use of another's advertising idea in your ‘advertisement’,” with “advertisement” broadly defined.
Pinder v. Nautilus Ins. Co. accepted that the conduct fell within both offenses as it was conceded by the insurer.[2] Illinois Cas. Co. v. Kladek, Inc., et al. similarly noted without analysis that the conduct fell within the coverage provisions, but it did not state whether the insurer had affirmatively conceded that point.
In Princeton Excess & Surplus Lines Ins. Co. v. A.H.D. Hous., Inc., offense “e” was eliminated by an endorsement, and the Fifth Circuit determined that the models’ images did not qualify as an “advertising idea” under Texas law. The court interpreted the models’ images as more analogous to their product than an “advertising idea.” It therefore found no potential coverage due to the Laney Chiropractic holding that “without more, taking and then advertising another's product is different from taking another's ‘advertising idea.’”[3]
In AIX Specialty Ins. Co. v. Timed Out, LLC, the court took a similarly limited view of the scope of offense “f.” It concluded that “Timed Out's complaint alleges only that Godtti misappropriated the models’ likenesses as they appeared in digital images—not that Godtti misappropriated an advertisement or advertising idea using those likenesses or images.”[4] The court did not provide any analysis to explain why the likenesses themselves could not be considered “advertising ideas.” The court did, however, accept that the claims fell within offense “e.”
Posada v. Aspen Specialty Ins. Co. provided no substantive analysis of offense “e” (for reasons addressed below), but it determined that offense “f” provided potential coverage:
Here, Plaintiffs' images are their product. . . . But it is possible that their images are also a concept related to the promotion of their product. After all, Plaintiffs allege that they establish their “brand” by the choices they make as to which companies they permit to display their image.[5]
Most Courts Concluded Exclusions Eliminated Potential Coverage
Of the four decisions, only Pinder concluded that no exclusions applied. The insurer argued for the application of its non-standard IP exclusion that eliminated coverage for violations of “intellectual property rights,” which the policy defined as “exclusive rights pertaining to the creations of the mind . . . .”[6] The court ruled that the term “creations of the mind” was ambiguous, thereby requiring a determination in favor of the insured.
Plaintiffs also point out that Nautilus wavers over what “creations of the mind” includes; for example, Nautilus suggests the phrase may include either the advertisements created by 300 F Street or Plaintiffs’ images. . . . Put simply, if Nautilus, the insurer and drafter of the policy, is uncertain as to what “creations of the mind” includes, the phrase is ambiguous because it is susceptible to more than one reasonable meaning.[7]
While A.H.D. Hous., Inc. had no occasion to analyze exclusions since it determined there was no potentially covered offense, both Timed Out, LLC and Posada determined several exclusions were applicable. First, both cases were decided in jurisdictions that have concluded violations of a person’s right to publicity fall under the umbrella of intellectual property torts.[8] As a result, both courts determined that any claims under offense “e” were eliminated by the standard IP exclusion for “infringement of copyright, patent, trademark, trade secret or other intellectual property rights.” In Posada, however, the IP exclusion could not eliminate all potential coverage since there is an explicit exception for offense “f.”
Alternative Policy Language Alleviates Coverage Issues
In Illinois Cas. Co. v. Kladek, Inc., et al., the insured sought coverage under a policy that retained the standard coverage provisions addressed in the other cases but differed in its exclusions. The insurer argued for the application of three exclusions, which precluded potential coverage for claims arising out of:
[Violations of any] federal, state, county, municipal or local consumer fraud protection law, regulation, ordinance, order, or directive barring fraud, unfair competition, and/or deceptive business practices
Any electronic chat room, bulletin board, or blog the insured hosts, owns, or over which any insured exercises control
The release or display of any “electronic media” on your “internet” site or “print media” for which you are solely responsible, which directly results in . . . [i]nvasion, infringement or interference with an individual's right of privacy including false light, intrusion upon seclusion, commercial misappropriation of name, person, or likeness, and public disclosure of private facts
The court readily determined the first was inapplicable because the models’ claims focused on how they were injured and did not address any harm to consumers.[9]
The insurer argued in favor of the second exclusion by noting “Facebook, Instagram, and Twitter—the platforms on which the Models’ images were used—all allow users to post or read messages and control or host their own bulletin boards.”[10] The court rejected that analysis.
Kladek posted the Models’ images on Facebook, Instagram, and Twitter. Kladek does not host, own, or exercise control over those social media platforms. Instead, Kladek used those platforms to promote its business. There is no evidence that it did so with any intention to generate any discussion among viewers. Indeed, the use of the Models’ images did not occur in a chat room, on a bulletin board, or on a blog. Instead, the images were posted on the pages of its social media accounts.[11]
The third exclusion was overcome by evidence of ambiguities created by the endorsement in which the exclusion was located.
It at once purports to modify the Businessowners Liability Coverage while at the same time states that its terms are limited to the Cyber Endorsement form. There is also confusion between the main liability form, which is written on a traditional “occurrence” basis, and the Cyber Endorsement, which is a claims made policy. . . . Kladek's expert opined that the Cyber Endorsement can be read as standalone coverage, and not a modification of the Businessowners Liability Coverage. . . . Finally, Kladek has pointed out that the wording of the Multimedia Exclusion is, itself, circular and facially contradictory. . . . This language is confusing.[12]
Conclusion
As demonstrated by the above cases, jurisdictional differences can be determinative in coverage cases. This highlights the importance and choosing the correct venue for any coverage action.[13] Kladek also serves as an important reminder of the usefulness of expert witnesses in addressing problematic exclusions.
*David A. Gauntlett is a principal of Gauntlett & Associates and represents policyholders in insurance coverage disputes regarding intellectual property, antitrust, and business tort claims, as well as in the underlying actions. Mr. Gauntlett can be reached at (949) 514-5662 or dag@gauntlettlaw.com. For more information, visit Gauntlett & Associates at www.gauntlettlaw.com.
[1] Posada v. Aspen Specialty Ins. Co., No. 8:22-cv-1578-CEH-AAS, 2023 U.S. Dist. LEXIS 55419 (M.D. Fla. Mar. 30, 2023); AIX Specialty Ins. Co. v. Timed Out, LLC, No. B320255, 2023 WL 6475087 (Oct. 5, 2023); Princeton Excess & Surplus Lines Ins. Co. v. A.H.D. Hous., Inc., 84 F.4th 274 (5th Cir. (Tex.) 2023); Pinder v. Nautilus Ins. Co., No. 2:24-CV-33, 764 F. Supp. 3d 1341 (S.D. Ga. Dec. 30, 2024); Illinois Cas. Co. v. Kladek, Inc., et al., No. CV 22-3214 (DWF/DJF), 2025 WL 2071043 (D. Minn. July 23, 2025).
[2] Pinder, 764 F. Supp. 3d at 1347.
[3] A.H.D. Houston, Inc., 84 F.4th at 284 (quoting Laney Chiropractic & Sports Therapy, P.A. v. Nationwide Mut. Ins. Co., 866 F.3d 254, 261 (5th Cir. (Tex.) 2017)).
[4] Timed Out, LLC, 2023 WL 6475087 at *6.
[5] Posada, 2023 WL 2711538 at *21.
[6] Pinder, 764 F. Supp. 3d at 1349.
[7] Pinder, 764 F. Supp. 3d at 1350.
[8] Timed Out, LLC, 2023 WL 6475087 at *5 (“[I]t is well understood that the right of publicity, like copyright, protects a form of intellectual property and thus is within the scope of the IP exclusion.”)
[9] Kladek, Inc., 2025 WL 2071043 at *4 (“Notably, the Models have not alleged that any “consumer” has been defrauded. Instead, the Models allege that they were wronged because their images were used without their authorization or compensation.”)
[10] Id. at *5.
[11] Id. at *6.
[12] Id. at *7.
[13] See David A. Gauntett, A Tale of Two Cases: What a Difference A Forum Makes, https://www.gauntlettlaw.com/blogs/a-tale-of-two-cases-what-a-difference-a-forum-makes-1 (June 10, 2021).