Updated at: 14-01-2023 - By: Helen Skeates

What is defamation in insurance? As you may well know, general liability insurance is designed to cover primary items like bodily injury and property damage. The act of spreading false information about a person or company, which can lead to irreparable harm to that person’s or company’s reputation, is known as defamation.

Defamation insurance, among other business-related risks, is covered by this policy. The term encompasses both advertising and personal harm liability.

The section of the policy dealing with defamation claims is the focus of this essay. Look into it more if you’re interested in learning about these.

What Defamation Is In Insurance?

So, how does insurance deal with libel? A person who engages in this behavior deliberately tells a lie about another person with the intent to cause harm. Slander and libel are two examples. It will be necessary to examine the method of falsehood fabrication in order to tell them apart.

Professional Indemnity Insurance For Defamation

Speaking ill of another person is slander, whereas writing about them is libel. There is more to a hurtful statement than just someone’s perspective. If a statement is made in bad faith, it cannot be considered defamatory.

Defamation lawsuits can be filed if false statements are made public and treated as reality. A lot of individuals don’t know what speech is protected by the First Amendment and what isn’t. False statements do not fall under the purview of this particular freedom.

Slander Vs. Libel

Again, the media through which the defamation has occurred is the defining factor. Defamation is most often committed by written or spoken word. Slander, on the other hand, occurs when a defamatory statement is made through verbal communication.

How defamation lawsuits happen

Anyone, including a company, can be sued for libel. Additionally, it is not uncommon for business owners and workers to utilize their personal social media accounts for company business as well.

Your employee may be sued for defamation if they make a false and damaging statement about a competitor on their personal Facebook profile. Your firm, not simply the employee who made the statement, could be sued by a competitor who misunderstands what the employee was saying and assumes he or she is speaking for the company.

Small businesses can’t afford to spend time and money in a defamation action, even if they are not responsible for the damage done to someone else’s reputation.

Defamation insurance might shield you from legal repercussions. This sort of protection is commonly seen in commercial general liability insurance policies.

Small businesses can’t afford to spend time and money in a defamation action, even if they are not responsible for the damage done to someone else’s reputation.

How Social Media Increases The Risk For Libel?

The advent of social media has made it easy for anyone to publish news or other content online. Since material may be released rapidly despite minimal to no control, libel risks have increased. There have been several examples of new hires making derogatory comments about a rival company. Ads or photographs would be posted without first being cleared by management.

How Can The General Liability Insurance Protect You?

General liability insurance protects a company against a wide variety of typical dangers. Damages for slander, libel, and defamation in advertising are also included in this category, along with more traditional forms of property and bodily injury.

An insurance company would be responsible for covering any costs associated with a defamation suit brought against you. Everything associated with going to court and settling a case will be covered by this.

The policyholder will be protected from any financial loss that may result from the litigation. Whether or if you are to blame is irrelevant here. For your firm to be safeguarded, insurance must be provided.

What Type of Insurance Policy Cover Defamation Claims?

Insurance is something that the vast majority of people have, whether it be vehicle insurance or home insurance. Defamation claims aren’t covered by standard insurance policies unless the policyholder pays extra.

Excess liability coverage is an optional add-on to most homeowner’s insurance policies that serves to increase the policyholder’s total liability coverage to a level greater than that of the primary liability policy. You might think of excess liability coverage as an umbrella policy that provides additional protection above and beyond what your basic insurance policy provides. A claim of defamation, for instance, may be partially or entirely paid for by “excess liability” insurance.

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Defamation insurance only protects those who publish in good faith or without knowledge of any wrongdoing, not those who publish intentionally incorrect information or do so carelessly. This is confirmed by the “knowing of falsehood” exclusion, which states that parties cannot depend on coverage where their conduct was willful or reckless. Also, under a “business activities” exclusion, you would be barred from defamation coverage if, as a business owner, you made defamatory statements about a competitor business or contractor in order to obtain financial advantage.

Legal Fact: Discuss “excess liability” coverage with your insurance agent before signing a policy, as it may be necessary in the event of a defamation lawsuit.

Some of the defamation and legal accusations that “excess liability” coverage can shield you from are as follows:

  • Slander
  • Libel
  • wrongful detention, incarceration, or arrest
  • Retaliatory prosecution
  • Physical and emotional dismay
  • Variations on the theme of individual responsibility for damages

It’s important to remember that every insurance plan is unique, and that no two insurance providers are obligated to provide the same coverage. The Ohio Department of Insurance provides a one-stop shop for policyholders in the Buckeye State looking for information about agents, policies, and companies that provide coverage for defamation and other torts.

If you, your profession, or your company routinely engages in publication, advertising, or promotional activities, then you should consider purchasing defamation insurance. People who partake in such practices are more inclined to seek out circumstances that could result in a defamation claim.

3 Steps To Avoid Defamation Lawsuits

Even if you or your company have an insurance coverage that can cover legal conflicts, that doesn’t mean you shouldn’t take precautions to avoid them. If you’ve ever been a party to a lawsuit, you know how stressful the process can be. That could lead to a rise in your insurance premiums.

Accusations of slander or libel can do even greater harm to a person’s good name. You can protect yourself from a defamation suit by following the procedures outlined below. Your company and your employees will benefit greatly from your attention to this.

Step #1. Educating your employees

As a leader, it is your responsibility to teach your people the dangers of defamation and how to prevent them. Furthermore, people should realize that the words they choose to use online might have repercussions for both themselves and the business.

Step #2. Monitoring social media

Social media policies need to be put in place. Then, enforce its observance by your team in order to forestall legal trouble. You can accomplish this by monitoring your community for any instances of libelous speech and taking appropriate action if necessary.

Step #3. Using common-sense

Don’t make claims about a company or an individual unless you have solid evidence to back them up. If you are not saying anything that could be taken as slanderous, you will not be sued.

If the claims you made online were founded in reality and were backed up by proof, it is quite improbable that someone would sue you for posting them. And if they do decide to sue you, you have the upper hand because you can back up your claims with evidence.

I’m a Journalist, Do I Need to Purchase Defamation Insurance?

Fox News personality Eric Bolling filed a $50 million lawsuit against writer Ali Yashar in August 2017, claiming that Yashar had defamed him in an article he had written for New York magazine and the Huffington Post. 1 Yashar’s piece on HuffPost in which he accused Bolling of sending pornographic images to three coworkers was at the heart of the lawsuit. According to Yashar’s lawyer, the lawsuit is “a planned effort to harass and threaten Mr. Ali personally,” and Huffington Post CEO Lydia Polgreen has promised to pay for the entire case. 1

Some contracts cover news companies from legal action, leaving contributors and journalists high and dry and liable if they are ever sued. This is not the case for all journalists and freelancers. With litigation and the potential of lawsuits being launched against freelancers and journalists being a grim reality, the question arises as to whether or not they should invest in defamation insurance.

Yes. Journalists, independent contractors, and freelancers should strongly consider investing in specialized insurance that protects them from libel, slander, and other defamation lawsuits. This creates an imbalance of power between the parties involved since publishers and other organizations can create contracts with warranties, representations, and indemnity clauses that favor them while leaving journalists more exposed to legal risk. That’s why it’s crucial to provide safety measures for journalists and other independent workers.

Freelance journalists, independent contractors, and other professionals should avoid acquiring general liability policies since they may not cover all potential contingencies in the event of a defamation lawsuit.

Journalists frequently fail to grasp that general liability policies are not the answer for effectively protecting themselves due to the one-sided nature of such contracts. Journalists and freelancers can be held liable for the content that their employers print and distribute because general liability plans do not often cover defamation allegations in a comprehensive context.

Journalists and independent writers should look for media liability policies that cover the following when shopping for specialized defamation insurance.

  • Defamation lawsuits can be quite expensive to defend. In the modern litigation landscape, frivolous defamation suits abound; most of them are dismissed before trial, so it’s important to protect yourself from having to pay out of pocket to defend yourself.
  • When it comes to publishing and newsgathering, journalists and freelancers need to be sure that any potential legal liabilities are covered by their insurance policies. Libel, defamation, invasion of privacy, errors and omissions, and intellectual property infringement are all areas that should be covered by such insurance.
  • The practice of “forum shopping,” or selecting the legal jurisdiction most likely to produce a favorable judgement, is known as “libel tourism,” and it is a rising problem in the realm of defamation. The rights of journalists and freelancers can be better safeguarded on a worldwide scale if they purchase a coverage that covers charges filed outside of the United States.
  • Coverage for unforeseen incidents is provided by “occurrence insurance,” which are in place to safeguard journalists and independent contractors. It’s crucial for everybody involved in the writing or publishing process to have such a policy in place, as a claim may not be made for years after the fact.
  • There is no Consent to Settle or “Hammer Clause” clause: In the same way that a hammer can crush a nail, a “hammer provision” can be used to coerce an insured party into settling a claim. To avoid spending too much on legal representation, some people choose to settle libel or defamation cases as soon as possible. To avoid having the First Amendment muzzled in favor of lower litigation costs, it is crucial that your insurer has a firm grasp of defamation and media law. Most defamation insurance policies should need policyholder approval before making any settlements.

Consider defamation and media liability insurance the same way you would consider an accountant or other operational expenses.

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It’s A Wrap!

Remember that there is always the possibility of a defamation case involving your company, no matter how careful you are. Nonetheless, if you purchase a general liability coverage, you can safeguard your company from financial loss in the event of a lawsuit.

In conclusion, it is not enough to know what constitutes defamation in insurance; you also need to educate your personnel on this in order to safeguard your company. More vital, though, is investing in adequate insurance coverage.