If Your Agency Posts an Unlicensed Image, Who Pays?

Your agency posts a video with a trending song under it, or drops in a photo a designer found through a quick search. Nothing happens for a while. Then a rights holder’s lawyer sends a notice, or your legal team fields a call about a licensing complaint. The post comes down fast. The real question is whose contract says who pays for it, and if you haven’t read that section of your master services agreement, you probably don’t know the answer.

The clause nobody negotiates

Agencies write their own contracts, so every clause reflects the drafter’s interests unless the client pushes back. Buyers push back on ownership and payment terms, but indemnification usually gets skimmed as boilerplate. It typically says close to nothing: no indemnity from agency to client for content the agency creates or sources, only a promise the other way for client-supplied materials, and where an agency-side indemnity exists, it’s often capped at the last month or two of fees. A fair version runs both ways, and for IP claims carries no cap, or one well above a routine retainer. See who owns the content after the contract ends for the clause buyers do negotiate.

Warranty, indemnity, and liability cap are three different clauses

Treat these as three separate promises; a contract can include one without the others, and the gap is where you get exposed. A warranty is a statement of fact, a promise that delivered content is original or properly licensed, as Cornell Law School’s Legal Information Institute defines it. On its own it says nothing about what happens if that promise turns out false. An indemnity, described by the same source as a distinct legal concept, is the separate obligation to cover a loss if that happens. State the warranty without indemnity, and it’s close to decorative: the agency broke its promise, but nothing obligates it to cover the loss.

Where the exposure actually comes from

Using a copyrighted work without permission can constitute infringement, with remedies including monetary damages, per the U.S. Copyright Office’s FAQ and the remedies chapter of the Copyright Act. A few hypothetical scenarios show where the risk lives in ordinary agency work:

• A stock photo used under an unclear license.
• A trending track dropped into a short video, though personal and commercial use of a track require different rights.
• Giveaway entries reposted with no rights release from entrants.
• A competitor’s logo used in a comparison post without legal review.

None of it is negligence. Volume alone produces the edge case.

The one-way indemnity you’ll find in agency paper

The typical MSA indemnifies the agency only for claims tied to client-supplied materials, logos, photography, existing copy, not for content the agency itself creates or selects. A stock image the agency chose, or music its editor picked, becomes entirely your risk. The matching cap ties agency liability to fees paid, often the trailing one to three months of retainer, though enforceability of a fee-based cap depends on governing law and the specifics of the claim, so that is worth confirming with counsel. Either way, a month or two of retainer rarely covers what an infringement claim costs.

Three things to ask for before you sign

• A real warranty of originality and licensing, stating all delivered content is original or properly licensed, with terms available on request.
• A mutual indemnity covering content the agency created or selected, naming copyright, trademark, right of publicity, and music licensing claims, not only materials you supplied.
• A liability cap that carves out IP and rights claims, or sets a separate ceiling for them, instead of tying an infringement claim to the same cap as a missed deadline.

None of this requires unlimited liability, just treating rights claims as the distinct risk they are. See what else to check in a social media agency contract for the rest of the document.

Why the indemnity needs to survive termination

Most contract breaches surface while the relationship is active. Content infringement claims don’t: a rights holder can discover an infringing post a year or two after it went up, well after the agency relationship ended. If the indemnification clause is silent on termination, you could be left holding that claim with no contractual path to make your former agency cover it. The fix is a survival clause keeping the indemnity obligation alive after termination for claims tied to work performed during the contract term. Review this alongside how termination clauses are structured, since survival language gets missed there just as often.

If a notice actually arrives

Duty to defend means the agency pays legal defense costs while a claim is litigated. Duty to indemnify means it covers the loss once liability or a settlement is determined. A contract can have either without the other. What people call a takedown notice comes from the notice-and-takedown process the Digital Millennium Copyright Act established.

• Take the post down or restrict it while you evaluate the claim.
• Preserve the notice exactly as received, unedited.
• Check the contract for who holds the duty to defend versus indemnify.
• Loop in counsel before you or your agency replies to the claimant.

Where to go from here

If you’re still choosing an agency, browse vetted agencies and ask to see the indemnification language in a sample MSA before you’re deep into a pitch process. If your paperwork already handles warranty, indemnity, and survival correctly, list your agency free and let buyers see it.

FAQ

What’s the difference between a warranty and an indemnity in an agency contract?

A warranty is the agency’s promise that the content is original or properly licensed. An indemnity is the separate obligation to cover the cost if that promise turns out false and a third party makes a claim. A contract can state the warranty and leave out the indemnity, which makes the promise unenforceable in any financial sense.

What should I do first if I get a takedown notice or claim letter for something my agency posted?

Take the specific post down or make it private while you evaluate it, preserve the notice exactly as it arrived, and check the contract for who has the duty to defend versus the duty to indemnify before you or your agency responds to the claimant.

Sources

• U.S. Copyright Office, Copyright FAQ, fetched 2026-09-26.
• U.S. Copyright Act, Chapter 5, Remedies for Infringement, fetched 2026-09-26.
• Digital Millennium Copyright Act, U.S. Copyright Office, fetched 2026-09-26.
• Cornell Law School Legal Information Institute, Wex: Indemnity, fetched 2026-09-26.
• Cornell Law School Legal Information Institute, Wex: Warranty, fetched 2026-09-26.