Nearly 85 per cent of all images used on the internet are not licensed. Whether this comes as a surprise or not, it shows that some of us are using images illegally and may face a costly fine if found out.

Last year, a well-known picture agency issued over 1,000 letters per month in the UK demanding payment from companies which it claimed had used images on their websites obtained without a licence. The letters included a demand for payment based on an estimated "average" cost - and they were not nominal amounts.

Alarmingly, where previously organisations may have been given the opportunity allowing rights to be purchased or images to be taken down from websites, letters of demand for fines for thousands of pounds are now being received and enforced. And sometimes these fines are not only being given in clear cases of theft, but they are also prevalent in grey areas stumbled into by designers who intended to comply with copyright, but just didn't know how to adhere to the law.

Image licence abusers, knowingly and unknowingly, are increasing with the advance of new technology. And for several years, larger picture libraries have been using companies to scan the internet looking for copyright infringements. Obviously this is a good thing as it raises awareness of intellectual property rights and protects the rights of photographers. And it certainly highlights the importance of accurate paperwork, reading the fine print; it even encourages organisations to commission photography directly from photographers meaning licenses can by purchased directly.

When purchasing images, whether they are photographs, illustrations, animation or even sound directly from an artist, photographer or library, it's crucial that you are aware of restrictions and limitations regarding copyright and use.

When you buy an image for commercial use, you should also purchase the right to use the image in a particular way. This is called a licence. There are different types of licence available from reputable image libraries and licences usually come under the following types: Royalty Free and Rights' Managed.

If you decide to use an image and the image is classified as rights'-managed licence, you need to comply with certain restrictions on usage, such as limitations on size, placement, duration of use and geographic distribution. You must specify the intended use, media, territory and duration for each usage, and the cost charged to you by a picture library for this use is based on these parameters.

Contrary to what some people believe, royalty-free images are not free. They may be used multiple times for multiple projects without incurring additional fees, but you do need to purchase the image at the outset. Royalty-free pricing is based on the file size of the product and the number of people entitled to use it, not the specific use. You normally don't have to pay any additional royalties for successive uses of a royalty-free product.

There are some subjects which will never be classified as royalty-free, including certain brand names and logos, specific buildings, stadiums, and even events.

Picture libraries might also offer editorial images for rights'-managed licensed use. These are also licensed with restrictions on usage, and must be used in an editorial manner, which means use relating to events that are newsworthy or of public interest. Negotiating commercial use with editorial images is never a good idea, as product endorsement is a very expensive business.

If you are not sure if your image selection is right for use in your final project, you can also negotiate the use of a smaller size image for comping or for a preview use. These might be issued free of charge, or sometimes for a small fee, for a limited duration, provided they are used only for personal, non-commercial use and solely for test or sample purposes. Comping files are usually used in order to take a closer look at a particular image or to create materials for proofing presentations to clients. Comping files are not licensed for use in final projects, whether for internal or external use.

Music, animation and film are also available for use and can be licensed with the usual restrictions on usage, such as client, use, format, and media. These are especially popular with PowerPoint presentations when you need to use a professional piece of animation or film an excerpt of professional film is required.

If you are using images which have been supplied by an image library, remember to keep a copy of the original licence. If you can't prove when and what you agreed, you may be fined and have no recourse other than expensive legal arguments. Also, if you re purchasing a royalty-free image make sure your licence clearly states that it was purchased as royalty free. The image classification may change in the future, and just being able to prove you paid for the photo may not cover the actual use.

And when it comes to website use, you might assume any images are correctly licensed for template distribution. However, you can no longer expect that no one will notice unlicensed images, even on low-traffic sites. To avoid any problems, only use templates with images if you have a copy of the original licence.

There is a host of reputable picture libraries to source any genre of image from. All of which have knowledgeable and helpful account handlers who will be happy to help with any image queries you might have in relation to usage across all your Microsoft Office projects. Don't take the risk of using images without proper permission - you might end up paying much more than the reproduction price.