Can Your Business Be Liable for Internet Defamation?

Social media is a great way build your business’s reputation. Interactivity between merchants and customers has helped many unheard of boutique shops become Internet darlings with maxed out sales. However, fostering social media on your website or participating in social media on another’s blog is dangerous.


The danger is Internet Defamation.


What is Internet Defamation?

Defamation is when a person makes false statements about your business such as you use discriminatory practices in hiring, or you use dishonest practices dealing with your customers. Making statements like these and putting them on the Internet for anyone and everyone to see is libel. There are important elements for a statement on the Internet to earn the label of a defamatory.


·         The person who published the statement was not the person defamed

·         The statement is a false statement of fact

·         The false statement was understood to be:

·         About the plaintiff and

·         Designed to harm the reputation of the plaintiff

·         Should the plaintiff be a public figure he or she must also prove malice.


Businesses with a presence on the Internet, especially if the Internet site encourages comments and dialogs among visitors need to be especially vigilant monitoring about what other users post on their site. There is a powerful federal law known as Section 230 of Title 47 of the United States Code (47 USC § 230). This federal law is part of the Communication Decency Act of 1996. This law has precedence over any local or state laws and protects owners of interactive computer service providers from claims of defamation from postings made through reader’s comments, entries of guest bloggers if you support a business blog site. In other words, this law gives you as a web host protection from claims made from hosting information written by third parties.


Then why should a business watch what third parties say on their site? is a valid question. You want your site and blogs to promote your brand, not distract from that purpose by allowing a “flame war” on your sites.


Allowing an offensive statement to stay on your site, even when written by a third-party is off-putting to potential clients and customers,


Your own employee gives in to baiting into a discussion and trying to defend your business engages in Internet Defamation costing you customers and even cash if a lawsuit against you goes to court.


Insurance for Internet Defamation

Even though the Section 230 language and the truth - if what you said is true it is not libel - help keep the threat of you being successfully sued for Internet Defamation lower, it is a risk that your insurance advisor can cover through your BOP policy, your General Liability Insurance, or an Umbrella Policy.


Talk with your advisor to understand your risk and the best way to cover it with insurance.

Need insurance for You, Your Family or Your Business?
We can match you to a qualified, local insurance expert!
Further Reading
You spend much time together, and share the burden of difficult decision making. But it's not your spouse - it's your business partner. Your business partner is a tremendous asset to your company. So, how do you protect your business in the event of ...
Most new business owners are concerned that everything is favorable for the success and safety of their business, which includes obtaining the protection of business insurance. However, longevity and success can cause complacency. Let's say you star...
Every company has one or more "key employees" (whether it's an outstanding manager, a superstar salesperson, or a technological whiz) whose contributions are essential to the business. If one of these key people were to die, the impact on your operat...
In any traffic accident, two entities can be held liable for damages: the at-fault driver and the vehicle owner. Insurance companies generally view the vehicle's insurance to be primarily liable with the driver as secondary. Let's assume you're...
Your small business expenses and personal expenses should stay separate. However, it's easy to spend business funds for personal expenses, which can affect your personal credit. Understand the business credit mistakes that put your personal credit at...