Music licensing claims are coming for marketers — is your organization ready?
Claims involving unlicensed music, videos, and other copyrighted content are becoming one of the fastest-growing intellectual property (IP) infringement exposures. Here's what organizations can do to reduce risk and strengthen their position with underwriters.
A growing source of IP infringement risk
Claims arising from the unauthorized use of music and other copyrighted content in digital marketing, social media, and advertising have become one of the most active and fastest-growing sources of IP infringement risk. Rights holders, which range from major labels to individual composers and publishers, are increasingly pursuing infringement claims tied to social media posts, influencer content and advertising campaigns that are using their unlicensed IP. Even historical content that organizations posted years ago and never revisited can be ripe for claims if prior agreements related to their use are not properly documented.
Several converging trends are driving an increasing risk for companies. These include:
More frequent infringement claims. A rights holder whose work is registered with the U.S. Copyright Office can claim statutory damages of $150,000 per infringement without showing loss. In most cases, insurers will deny a claim if “willful” infringement is alleged. Given the global nature of IP rights, claimants can often forum-shop.
Major rights holders continue to bring high-profile infringement actions, and once one major rights holder acts, others often follow.
The decentralization of content creation. Where advertising agencies once handled licensing reviews, content is now frequently created and posted directly by marketing teams and influencers, often without the same level of rights clearance. Where external agencies and individuals are engaged on behalf of a company, the management of this content can be challenging.
Old content creating new problems. Companies often keep videos and social posts produced over several years online in the public domain, often with little or no documentation showing whether music or other copyrighted content was properly licensed.
Use of AI-generated content: The ease of creating audio and visual content, which may be very clearly similar to that of third-party works, has increased the risk of infringement. AI-generated content is especially prevalent on social media, creating new risks for organizations and individuals. The increasing availability of cheap software to detect potentially infringing works has now made it much easier for rights holders to police infringing AI-generated content.
Different approaches by individual insurers. Some carriers exclude music-related claims altogether, while others continue to underwrite the exposure if insureds can demonstrate strong licensing and risk management practices. It is becoming increasingly common for insurers to exclude AI-generated content.
What music licensing claims look like
Music licensing claims can show up in several ways. Common sources of claims include the reposting of other people’s photos or videos without permission or credit; using full songs in content; and using copyright- and trademark-protected characters, logos, or artwork in merchandise, thumbnails or promotional material without licensing.
Some individuals and organizations may erroneously believe that giving credit — for example, tagging a creator with the comment “no copyright intended” — legal excuses use of that creator’s content, but it does not. Similarly, it should not be assumed that short clips constitute permissible fair use; this is is not an automatic defense to copyright infringement, as fair use is a fact-specific legal defense for purposes including criticism, commentary, news reporting, and teaching, but typically not marketing.
The following examples show where problems often start and what they can mean for insurance coverage.
A company's marketing team incorporates a popular sound recording into a promotional video without confirming that synchronization and master use rights had been secured. The rights holder later demands damages and threatens litigation. Insurance coverage may respond, but only if the policy includes IP infringement cover and does not contain a content exclusion.
A content audit uncovers older videos that a company had posted years earlier. The organization cannot locate licensing records, and therefore cannot verify whether rights have ever been secured. Carriers view these undocumented content libraries as a significant source of exposure and arguably as known risks that should be disclosed to underwriters prior to inception of a policy, likely resulting in exclusions.
A sports team, its venue, and event operators face a lawsuit on behalf of an artist tied to the broadcast of the artist’s music in a stadium during a sporting event without permission. Performance royalty organizations police venues and platforms on behalf of rights holders and often bring strategic litigation for improper use of their content.
A company launches an advertising campaign using music, videos, and images sourced from the internet without proper licenses. Media liability insurance coverage may respond to defense and settlement costs, subject to limits, but only where the claim is a content/IP dispute rather than a design or unfair competition issue.
A social media influencer posts a video promoting a retailer, which is the sued by a major music company, which alleging that its copyrighted music appeared in the promotional video without a license. Insurers increasingly point to influencer-created content as a growing source of claims activity.
The questions underwriters are asking now
During insurance program renewals, underwriters are increasingly asking organizations to demonstrate strong licensing controls when they seek access to broader coverage. One particular area of focus is the documentation of historical rights agreements, such as synchronizations rights that permit the use of a musical composition alongside visual media, or master use rights, which are agreements to the use of specific recordings.
Among other questions, your underwriter may ask:
When incorporating sound recordings into audio-visual works posted online, has your organization secured synchronization rights and master use licenses (including any “blanket” licenses)?
Has your organization searched and reviewed historical videos posted to its website or social media to confirm synchronization and master use rights, and removed any content for which rights cannot be confirmed?
Does your organization use music-scanning technology to continuously identify and remove infringing content from its website and social media presence?
Has your organization had a prior music licensing claim? If so, what remediation steps were taken?
Do your influencer agreements require the influencer to secure all rights to music and other third-party content?
Does your influencer agreement contain an indemnity clause to shift the copyright infringement to the influencer?
Being able to answer these questions affirmatively can help companies reduce litigation risk. It also improves their standing with underwriters at renewal, including enabling access to carriers without blanket music/licensing exclusions.
Seven ways to reduce your exposure
A few practical steps can help organizations avoid licensing problems and put themselves in a stronger position if a claim or underwriting question comes up.
Confirm rights before content goes live. Ensure that synchronization rights, master use licenses, and any applicable blanket licenses have been secured before using music in videos posted online.
Audit existing content. Regularly and frequently review previously published content and remove or re-license materials if rights cannot be verified. Marketing teams should have a process and procedure to follow when placing content, while always remembering that copyrighted music is rarely available to use for free.
Ensure continuous monitoring of content. Technology can help organizations identify and remove potentially infringing content before it becomes a larger problem.
Bring legal and marketing together. Rights review should not happen in isolation. Organizations should ensure legal and marketing teams work together when third-party content is involved.
Use contractual levers to extend policies and procedures to influencers and partners. The same approval standards that apply internally should also apply to outside creators and brand partners.
Use outside expertise when needed. Organizations without in-house legal resources may benefit from outside counsel or specialty licensing advisors.
Keep documentation organized. Maintaining records of licenses, rights clearances, and agreements can make a significant difference during both claims handling and underwriting reviews.
What this means for insurance buyers
Coverage for music licensing and copyright claims generally sits within media liability or multimedia liability provisions of a cyber or technology errors and omissions (E&O) policy. However, carrier approaches vary considerably.
Some insurers continue to view music licensing as an exposure that can be underwritten and are willing to provide coverage when clients demonstrate strong licensing controls and remediation practices. Others have responded by introducing exclusions or revisiting policy language as claims activity increases.
Organizations should pay particular attention to older exclusionary language. Many exclusions were drafted in response to a different generation of music-related claims and may not fully reflect today's social-media-driven exposures.
That's why policy language should be reviewed carefully rather than assumed to address current risks. Because copyright claims frequently overlap with allegations involving unfair competition, false advertising, and tracking technologies, media liability and cyber coverages should be evaluated together rather than in isolation.
Music licensing and copyright litigation are no longer exposures confined to media and entertainment companies. Any organization that advertises online, publishes digital content, or works with influencers can find itself facing a claim.
The good news is that most disputes stem from preventable issues. By taking a proactive approach to licensing, monitoring, and risk management, organizations can reduce the likelihood of claims while strengthening their position with insurers.
Given the evolving nature of music licensing and copyright claims, organizations should not assume that existing practices or insurance policies adequately address today’s digital-content risks. Companies should work with their legal, marketing, and risk management teams to review licensing controls, historical content, influencer agreements, and relevant policy language. To better understand how these exposures may affect your insurance program, contact your Lockton broker to discuss available coverage options, underwriting expectations, and practical steps to strengthen your organization’s position before a claim arises.
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