Unauthorized broadcasts of pay-per-view fights, such as Ultimate Fighting Championships, professional boxing, and other professional sporting matches, are prohibited under federal law by the Communications Act of 1934 and the Cable and Television Consumer Protection and Competition Act of 1992.  Because subscription television programming is intended for the benefit of paying subscribers only, unauthorized airing of these programs for commercial gain is unlawful.  Entities that hold the exclusive commercial exhibition and distribution rights can sue any business owner who broadcasts fights at their establishments without a proper license.

How can you violate these laws?  If you are sued for broadcasting fights without the proper license, what kind of exposure do you create for yourself? Can you turn the suit over to your insurer for coverage for losses stemming from these illegal broadcasts?

  

There are numerous ways a business can violate these laws.  An obvious case is when a business owner intercepts a program from a satellite uplink and "distributes" the event at its place of business.  Less obvious infringing conduct will also create liability, however.  For example, a violation can be found where an individual officer of a business ("John Doe") legally purchases a personal license to watch a fight, but shows it in a commercial setting (at their bar "John Doe's Saloon").  Moreover, a business can also be held liable for a violation if it has "the right and ability to supervise" the infringing activities and had "an obvious and direct financial interest in the exploitation of the copyrighted materials" or if it "authorized" the infringing conduct.

  

In addition to the costs to defend a lawsuit arising out of such a broadcast, violations create large exposures for businesses, as courts will award attorney fees, statutory damages, and enhanced damages where a willful violation of the statute is shown.  Damages may differ depending on the circumstance.  In instances where a business owner is found to have broadcast the fight to an unknown number of patrons, for example, the court will award a flat sum by taking into account the proportionality between the loss suffered by a plaintiff and the profit gained by the business owner.  Conversely, when the exact number of patrons is known, the court will base an award on the number of patrons in the establishment who viewed the unauthorized showing multiplied by a number set by the court.  If any violation is found, regardless of the number of patrons viewing the broadcast, attorney's fees and costs are mandatory and will be awarded so long as the court finds the fees reasonable.

  

We have yet to find a policy form that includes coverage for these acts.  They're often excluded on several grounds, and business owners will be responsible for providing their own defense in the event they are sued.  For example, the injury alleged from unauthorized broadcasting is not "bodily injury" or "property damage" as defined by most Businessowners Liability coverage forms.  Moreover, the act of broadcasting a pay-per-view event is not an "occurrence" as defined in a policy and would not be covered.  Finally, the Businessowners Liability coverage forms we've seen do not cover liability arising from violations of federal law.

  

If you want to air a pay-per-view event, you should contact your cable or satellite provider about obtaining the proper commercial-use license for the event.  Those who violate laws governing the broadcast of these subscription-required events not only do so at their own peril, they almost certainly do so with no right to coverage from their insurers.

  

That's not chump change, especially the way business is right now.

  

If your business is struggling, that's one thing, but if your difficulty is remembering to send the payment on time, there are alternatives for you.  Pretty much every insurance company has a type of "automatic" payment option available.  It may be called an "ACH" (Automatic Clearing House) or "EFT" (Electronic Funds Transfer) plan, but they all work the same way - you submit a bland, voided check and complete a form authorizing the insurance company to deduct your monthly payments from your account and they do just that. 

  

You worry about running your business and making sure there's money in the account and they'll make sure your payment is taken on time.  No more late fees, no more cancellations, and one less thing to worry about.

  

Some companies may also offer a "Recurring Credit Card" (RCC) payment option, which is just what it sounds like - you complete the form and your monthly payments will be billed to your credit card on the due dates. 

  

Again, specific payment options vary by insurance company, but if you're looking for every nickel and dime you can find, and are comfortable with the idea of having your payments automatically withdrawn, this may be something you'd like to take advantage of.