insurer can't use "promotional event" exclusion to avoid coverage for recurring club nights

Acosta v. Clear Blue Specialty Ins. Co., 2026 WL 2093910, No. CV-24-03681-PHX-DJH (D. Ariz. Jul. 21, 2026)

Plaintiffs are models trying to recover for claims resolved by consent judgment in their underlying lawsuit, one of the many against adult clubs around the country.

In various social media posts, the insured used plaintiffs’ images to advertise club events, such as “Champagne Saturdays,” “Latin Ladies Night,” “Working Man Specials,” and “2 por 1 Martes.” Plaintiffs claim that their injury constituted a “personal and advertising injury” under the policy.

But the Policy excludes coverage of “personal and advertising injury” that arises out of “exhibitions and related marketing,” defined as:

(a) The creation, production, publication, performance, exhibition, distribution or exploitation of motion pictures, television programs, commercials, web or internet productions, theatrical shows, sporting events, music, promotional events, celebrity image or likeness, literary works, and similar productions or work, in any medium including videos, phonographic recordings, tapes, compact discs, DVDs, memory cards, electronic software or media, books, magazines, social media, webcasts and web sites.

(b) The conduct of individuals in shows, theatrical productions, concerts, sporting events, or any other form of exhibition.

(c) Merchandising, advertising or publicity programs or material for the operations and material described in (a) or (b) above.

Plaintiffs argued that a “promotional event” is not “a party at a nightclub but rather an ‘event’ thrown in furtherance of promoting something…”

The insurance company responded contested images were advertisements for “promotional events” as the events advertised “were not ordinary nightclub evenings.” They touted “drink specials, free admission for women, reduced dance pricing, and other deals.”

The policy didn’t further define “promotional event,” so the court analyzed the terms of the policy as written and from the “viewpoint of one untrained in law or in the insurance business.” Sampedro v. Clear Blue Specialty Insurance Company, 2026 WL 1291919 (M.D. Fla. May 12, 2026), held that the same exclusion unambiguously excused the insurer from defending the nightclub in a similar case involving ads for “the ‘Pretty Chicks & Kicks’ and ‘Tastee Tuesday’ events.” The court reasoned that, even under such a definition, “[the nightclub’s] promotional events promoted the nightclub itself through alcohol sales and DJ appearances.”

Nobriga v. Clear Blue Specialty Insurance Company, 2026 WL 1998727 (D. Conn. July 10, 2026), used dictionary definitions to define a “promotional event” as “a noteworthy happening or social occasion or activity serving the means of furthering the growth or development of something, particularly the acceptance and sale of merchandise through advertising, publicity, or discounting.” Based on this definition, ads for the café’s “Cinco de Mayo Party,” “Halloween and St. Patrick’s Day parties,” and “Baseball Night” constituted advertisements for “promotional events.” “[E]ach advertisement offered discounts on food and entertainment with the goal of bringing additional customers through [the café’s] doors, and tied such discounts to specific holidays or themed nights such as baseball night” making them “advertising” for “promotional events.”

The court agreed that a “promotional event” need not be in furtherance of something other than a business itself. But it thought that the common understanding of “promotional event” wasn’t broad enough to encompass “every promotion put in place by a business.” While holiday parties qualify as “promotional events,” the same couldn’t be said for ads “tied to…a recurring weekly promotion[,]” such as “Baseball Night.”

Here, some of the events advertised seemingly occurred on the same day each week or at a defined time every day. Those were “a routine part of” the insured’s business, not a “noteworthy happening” or “social occasion,” and were untethered to anything but the promotions themselves. There was no special food; “merely offering drink and dance specials does not definitively transform a promotion into a promotional event,” nor did giving the promotion a title. “The lack of ties to a special occasion or specific occurrence” made the exclusion inapplicable. “To rule otherwise would require reading the word ‘event’ out of the phrase ‘promotional event.’”

The court also rejected the insurer’s argument for judgment on the pleadings that the exclusion applied because the underlying litigation arose out of the publication of a celebrity image or likeness. But not all recognized models are “celebrities.” More facts were required.

Clear Blue Specialty Ins. Co. v. 05 Petete, Inc., 2026 WL 2196263, No. 26-1891 (E.D. Pa. Jul. 29, 2026)

Similar result here on the same language. One underlying plaintiff pled herself out of coverage by pleading that she was a “social media celebrity,” but the others didn’t. “Being well-known in one’s profession or endeavors does not by itself raise one’s status to the level of a celebrity.”

As for the promotional events exclusion, “Contrabando’s High-Voltage Wednesdays,” “Exclusive Fridays,” “Matinee Sundays,” and “Euphoric Saturdays” were “certainly promoting Euphoria’s nightclub itself and are using the images of plaintiffs to do so.” But the ads were

merely encouraging the presence of patrons on Wednesdays, Fridays, Saturdays and Sundays generally and are not pointing to any Wednesday, Friday, Saturday or Sunday in particular. It is the standard business of a nightclub to sell liquor to its clientele and to provide musical entertainment. The offer of reduced prices from time to time is a standard business practice to entice customers. The reduced prices are not tied to a specific event or events but are in place for all Wednesdays, Fridays, Saturdays, and Sundays.

“While the World Series is an event, the baseball season is not an event. Likewise, while the grand opening of Euphoria’s nightclub or the opening of any business would be an event, its continual and regular day-to-day operation is not in ordinary parlance deemed to be an event or series of events. Such operation may continue for years.” Thus, the ambiguous policy language was construed against the drafter/insurer and it had a duty to defend against three of the underlying plaintiffs’ claims, and thus a duty to defend in the underlying lawsuit.