Display of Product: When Product Placement Constitutes Advertising
In Street Surfing, LLC v. Great American E&S Insurance Co., No. 12-55351, 2014 U.S. App. LEXIS 21804 (9th Cir. (Cal.) Nov. 14, 2014), the Ninth Circuit examined whether the display of product in a retail setting could satisfy the "in your advertisement" requirement in an insurance policy’s advertising injury coverage.
The court found that even when a product is promoted by a third party, such as a retailer, the insured may still benefit from advertising coverage under certain policy definitions.
Key Legal Issues in the Street Surfing, LLC Case
The case centered around the term “Street Surfer”, which the court determined qualified as an “advertising idea.” The dispute arose when the insurer argued that there was no direct advertising activity conducted by the insured. However, the court ruled that the display of product in a retail store—where a third-party retailer promotes the insured’s goods—could satisfy the advertising requirement in a policy’s coverage language.
The court’s interpretation broadened the application of advertising injury provisions by recognizing that product placement in retail settings, even when done by unaffiliated third parties, could still be considered advertising under certain policy terms.
Implications of the Court’s Decision on Display of Product
This case has critical implications for businesses and insurers navigating advertising injury coverage:
Product Placement Can Qualify as Advertising – The ruling establishes that display of product in a retail environment may trigger advertising-related coverage under commercial insurance policies.
Expanding the Definition of Advertising Injury – Courts may interpret advertising injury provisions broadly, including promotional activities that occur outside traditional media.
Insurance Coverage Can Extend to Indirect Advertising – Businesses that rely on third-party retailers for product exposure should review their policies to understand their potential coverage under similar circumstances.
Notable Takeaways for Businesses and Insurers
For businesses, this decision reinforces the importance of carefully reviewing commercial general liability (CGL) policies to determine whether product displays and third-party promotions might be covered under advertising injury provisions. Ensuring that product placement activities are explicitly considered in insurance agreements can help businesses mitigate risks in disputes involving promotional strategies.
For insurers, this ruling highlights the need to clearly define advertising-related coverage in policy language. Insurers must assess whether their policies explicitly account for indirect advertising exposure, such as product placements handled by retailers.
Final Thoughts on Display of Product
The Street Surfing case underscores the evolving landscape of advertising injury coverage and the growing recognition that display of product in a retail setting can constitute advertising. As businesses continue to leverage multiple promotional channels, including indirect retail placements, insurers and policyholders alike must stay informed about how courts interpret coverage obligations.
If your company is navigating an advertising injury dispute or needs legal guidance on insurance coverage for product displays, contact Gauntlett Law for experienced support in addressing complex coverage issues.