Napster and other companies that run afoul of copyright laws because of material on their Web site can’t look to a general business liability policy to bail them out, an insurance group is warning risk managers.
The Napster Web site was successfully sued for copyright infringement by the music industry in a case which was upheld by a three-judge panel of the U.S. Court of Appeals for the 9th Circuit. Napster said it would appeal.
In a cautionary press release, David Golden, director of commercial lines for the Des Plaines, Ill.-based National Association of Independent Insurers advised risk managers with a Web site that, "In most cases, don’t look to your insurance policy to bail you out if you are sued."
Mr. Golden said insurers would generally not accept such claims, "because nine times out of 10, that is considered a specialty coverage that general business liability insurance does not provide."
