Advertising Injury Coverage and Fashion Designs

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Modern businesses today consider their intellectual property as one of their most valuable assets. This is certainly the case for the fashion industry, where brands rely heavily upon trademark laws in the absence of a more robust copyright framework. Through well orchestrated marketing campaigns, fashion brands can appeal to a market sector based upon price, quality, style, or even status, and create a unique association in the public’s mind about their goods. As with any other business, however, selling fashion is not without risk. A brand can face lawsuits for trademark and trade dress infringement, copyright infringement, unfair competition, and defamation just to name a few. If a business took out a Comprehensive General Liability insurance policy, then it should look to its “advertising injury” coverage (referred to as “coverage B”) when faced with such a lawsuit.

Understanding such clauses, however, can prove critical. Insurance companies take a narrow view of what constitutes an “advertising injury” which often results in an insurance coverage denial. A policyholder should be prepared to contest such denials especially where there is “sufficient legal uncertainty about the coverage issue” at the time the tender was made.

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