Also known as: unfair competition · unfair competition claim · unfair business practices
Unfair competition is a group of business torts, such as false advertising, passing off, and misappropriation, where one company gains an edge through deceptive or wrongful conduct.
Unfair competition covers a range of claims that a business harmed a competitor or the market through deceptive, misleading, or wrongful practices, including false advertising, trade dress imitation, misappropriation of ideas, and disparagement. For startups this is a coverage minefield: some pieces, like advertising injury from disparagement or misleading advertising, may fall under a general liability policy's personal and advertising injury coverage, while broader antitrust and unfair competition allegations are frequently excluded from D&O and Tech E&O policies. Because the label spans covered and excluded conduct, how an unfair competition claim is pleaded and which policy responds can decide whether you have a defense paid for.
Unfair competition is a set of business torts in which a company gains an advantage through deceptive or wrongful conduct, such as false advertising, passing off its product as another's, misappropriating trade secrets, or disparaging a rival. It can be pursued under common law and various state and federal statutes.
It depends on the specific conduct and policy. Advertising-related claims like disparagement or misleading advertising may be covered under a general liability policy's personal and advertising injury section, but broader unfair competition and antitrust allegations are commonly excluded from D&O and Tech E&O policies.
Keep your marketing claims truthful and substantiated, avoid copying a competitor's trade dress or messaging, and protect trade secrets with clear agreements. Then review your policies' exclusions with your broker so you know which coverage, if any, would respond to a competitor's unfair competition suit.
Definitions are educational and may be modified by your specific policy language, endorsements, and state rules. For regulatory guidance, refer to the California Department of Insurance or the NAIC.
Last updated: July 2026.