The Nonprofit:
A nonprofit had a mission that focused on protecting and promoting historic sites and other culturally significant landmarks. As part of its outreach efforts, the organization created promotional materials for public events.
The Incident:
For an upcoming children’s event, the nonprofit created promotional materials that featured a cartoon character.
Nearly a year later, the nonprofit received a notice from a copyright enforcement group alleging that the character used in the materials was protected by copyright and had been used without permission or license.
The notice demanded payment and threatened legal action.
The Legal Action:
The nonprofit faced a potential copyright infringement claim based on the alleged unauthorized use of the character.
The Coverage:
The nonprofit reported the matter to its insurance broker and made a claim under its Commercial General Liability insurance policy with Nonprofits Insurance Alliance (NIA). Claims examiners reviewed the materials and assessed the potential exposure.
The Result:
After reviewing the images and circumstances, it was determined that improper use had likely occurred. NIA worked to reach a settlement to resolve the claim.
Things the Nonprofit Did Well:
The nonprofit carried Commercial General Liability coverage, which allowed the claim to be reviewed and resolved efficiently.
The organization reported the issue promptly and cooperated with the claims review process.
How Can Your Nonprofit Protect Itself?
Nonprofits that produce marketing or educational materials sometimes consider how images and creative content are sourced, how licenses are verified, and how permissions are documented before publication.
Clear review practices and documentation can help organizations reduce the risk of copyright disputes and respond effectively if concerns arise.
From the Claims Files stories are for general information only. They are simplified examples and do not guarantee coverage, a defense, or any specific outcome. Some losses described in this series may not be covered.
Coverage depends on the specific facts and on the terms, conditions, and exclusions in your policy. Contact your insurance broker or agent for guidance, and follow your policy’s claims reporting procedures if an incident may involve a claim.
This story is not legal, medical, financial, or professional advice. In an emergency, contact local emergency services first. Any risk management practices mentioned are general suggestions and may not apply to every nonprofit. Follow all applicable laws, licensing rules, and reporting requirements.
