The Meaning of Broadcasting and Its Application to a Media Exclusion

When is broadcasting broadcasting as opposed to transmission? And is there a difference? That was the question before the court on an appeal from a judgment that an insurer did not have to defend its insured in a copyright infringement suit. The question was pertinent because of a media exclusion in the policy.

In Dish Network Corporation v. Ace American Insurance Co., No. 20-0268-cv (2d Cir. Dec. 22, 2021), a subscriber-based satellite television provider was sued for copyright infringement by four television networks. The provider had a commercial general liability insurance policy that included coverage for “personal and advertising” liability subject to certain exclusions.

One such exclusion, Exclusion j (the “Media Exclusion”), excluded from coverage any liability arising from “‘[p]ersonal and advertising injury’ committed by an insured whose business is . . . [a]dvertising, broadcasting, publishing or telecasting.” The insurer denied coverage based on the Media Exclusion. The policyholder brought suit and the district court granted summary judgment to the insurer because of the Media Exclusion. On appeal, the Second Circuit affirmed.

In affirming, the court addressed the issue of whether the policyholder engaged in broadcasting when it only transmitted signals to paying subscribers. The court noted that there have been three other cases on the same issue; two (district court and circuit court) that upheld the Media Exclusion as the district court did here, finding that the policyholder was broadcasting even though it was transmitting only to subscribers, and one that found the term “broadcast” to be ambiguous.

The Second Circuit held that the term “broadcast” was not ambiguous and clearly applied to the policyholder’s business. The court found that the definition of broadcast fit exactly what the policyholder was doing, “transmitting a signal, especially a radio or television signal, to some
number of receivers.” The court held that the line the policyholder sought to draw — between free transmissions and transmissions to paid subscribers — was not reflected in the common use of the term “broadcast.” The court also rejected the policyholder’s argument that a specialized meaning of “broadcast” was intended to apply to the policy because the language of the policy did not suggest any intention to adopt a specialized definition of “broadcasting.”

Interestingly, in recounting the facts, the court noted that the insurance broker recommended that the policyholder purchase a Broadcasters Errors & Omissions policy, which the policyholder declined to do. Thus the need to try to fit within the CGL policy and get around the Media Exclusion.