The Fourth Circuit Court of Appeals has remanded a coverage dispute involving a Virginia Beach restaurant and its insurer to the district court. The case centers on allegations by a group of models who claim the restaurant misappropriated their images for promotional purposes without consent. The appellate court’s decision directs the lower court to assess whether the settlement between the restaurant and the models renders the insurance coverage dispute moot.
This case highlights the complexities surrounding insurance coverage in instances of alleged unauthorized use of individuals’ likenesses. Similar disputes have arisen in other jurisdictions. For example, in Massachusetts, a group of models sued three strip clubs for using their images in advertisements without permission. The federal district court ruled that the insurer was not obligated to cover the $1.9 million consent judgment against the clubs, citing that the images were used before the policy period and that exclusions for personal and advertising injury applied. ([insurancejournal.com](https://www.insurancejournal.com/news/east/2026/02/24/859272.htm?utm_source=openai))
In California, the Court of Appeal affirmed a summary judgment stating that a commercial general liability policy did not cover the infringement of models’ rights of publicity. The court held that the right of publicity is a recognized intellectual property right, and the policy’s intellectual property exclusion barred coverage for such claims. ([gmsr.com](https://www.gmsr.com/court-of-appeal-affirms-summary-judgment-regarding-rights-of-publicity/?utm_source=openai))
These cases underscore the importance for businesses to thoroughly understand the scope of their insurance policies, especially concerning exclusions related to intellectual property and personal and advertising injuries. As the Fourth Circuit’s remand indicates, the resolution of such disputes often hinges on specific policy language and the timing of alleged infractions.