“Personal and Advertising Injury,” as shown at the conclusion of the previous post, is equivalent to a “named perils”-type coverage. If the injury is not caused by one of the defined causes of loss – listed as “offenses,” there is no coverage.
The previous article simply listed the “perils” insured, below are examples of each of the listed offenses.
Some “Offensive” Examples
Retail stores, auto repair shops, restaurants or any operation where customers are likely to be all have an exposure to false arrest, detention or imprisonment. Consider a retail shop that suspects a customer of shoplifting; if they detain the suspect and then discover they had the wrong person, this could be considered false detention (unless there is an individual allowed to effect arrest – then it’s false arrest). Think about an auto repair shop that refuses to put a tire back on so the customer can leave, that is also false detention. Examples can go on and on; but the gist is that anytime the insured holds someone against his will and without “cause,” they may be guilty of this offense. Certain clients have a far greater exposure to this offense, such as security companies and private police contractors. Strict risk management guidelines for accusing and detaining customers or suspects must be developed and strictly followed.
Charges of malicious prosecution can be leveled against any insured that brings a civil or criminal suit against another without merit. In order for the “injured” party to charge malicious prosecution, there must be malice on the part of the insured and the trial must be found in favor of the injured person. Any insured who sues another person or entity to harass or for revenge will be covered by “personal and advertising injury” protection.
Insureds providing long-term or short-term living quarters are subject to charges of wrongful eviction from, wrongful entry into or invasion of right of private occupancy. This is not limited to lessors and landlords, such charges can be leveled against hotels and motels. The invasion of a person’s right to inhabit any living area is a covered offense.
Libel, slander and defamation can be charged against nearly any insured. In an effort to sway a new account, an agent makes a false statement about his competitor; or during a jobsite argument the plumbing contractor yells at the top of his lungs that the HVAC contractor is a “lying, cheating scoundrel” while several people are within earshot. Any written or oral statement that disparages another person, organization or product (true or not) could lead to charges of libel, slander or defamation.
Privacy rights have taken center stage in recent years. Insureds may have in their possession incredible amounts of private information: social security numbers, medical information, driving history, etc. If any of this information is allowed to make its way to an unintended party, the insured could be sued. Insurance agents, lawyers and doctors are prime examples; each has large amounts of personal, client-specific information in their possession. One question often arises when such personal information is stored on the computer system; if hacked, is such loss of private information covered under the “personal and advertising injury” coverage part? Probably not; for coverage to apply there must be publication of the information. Merely having the information stolen is not contemplated in the idea of publication. “Publication” is not defined in the policy, but its everyday meaning connotes that act of making something public. To have coverage for loosing or having the information stolen requires a different type of coverage.
Beyond personal data, violating a person’s right of privacy may include the use of their picture or likeness in an advertisement; posting their picture without consent; or maybe even the posting of insufficient-fund checks (subject to state laws). Some store owners have gone so far as to list the names of people who owe them money on signs outside the store. There are many legal issues outside the scope of this article pertaining to who has a right of privacy and who doesn’t (“public figure,” etc.), but paying attention to how clients manage and circulate information about others is critical. Everyone has the right to manage the use of their own information and image – any violation of that right can lead to charges of violating another’s privacy rights.
The last two “personal and advertising injury” offenses relate to advertising: using another person’s or entity’s advertising idea; or infringing on another’s copyright, trade dress or slogan in an advertisement. A hotel advertises, “We’ll leave the lights on for you;” or a cell phone network ad says, “So quite you can hear a pin drop.” Lifting another’s corporate slogans is one example of the coverage provided by this part of the definition. Using a logo, theme or any other attempt to confuse those seeing the advertising are other examples of this offense.
If the offense is covered by the definition, it must be compared against the 16 exclusions applicable to Coverage B. The next two posts detail these exclusions and their affect on coverage.
Agents can set themselves apart by knowing and understanding this overlooked coverage part. Pointing out loss exposures, showing coverage to finance the exposure and offering risk management where others don’t will make the agent stand out in the client’s mind.