Does your business have a website, a presence on social media (Facebook, Twitter, Instagram etc.) or anywhere else on the Internet where consumers can express their point of view? If you do, you need a Special Insurance Policy to cover you, your employees, and your company from claims of defamation (slander and libel).
Slander and libel lawsuits have become more common with widespread Internet use, and responsible insurance agents advise clients at risk to obtain coverage.
What is Defamation?
Defamation is a tort (wrongdoing) that harms the reputation of an individual. Many jurisdictions recognize that defamation is often unintentional and still allow claims for negligent or reckless defamation.
Libel means written defamation, and slander is oral or spoken defamation. For example, if a clerk falsely accuses a shopper of shoplifting and others hear the accusation, the business may face a defamation claim; libel refers to written statements that are untrue. For more detail, see Libel vs Slander — Defamation and Insurance Implications.
The only absolute defense against defamation is the truth. When the statement involves a public figure there is a higher legal bar: the plaintiff often must prove the statement was made knowing it was false or with reckless disregard for the truth.
If your business, an employee, or you are defendants in a slander or libel action, it is almost certain there will be costs associated with defending the claim.
Why do you need Defamation Insurance?
Publicly posted false statements can create liability for employees, business owners, and employers. Social media and online publishing increase exposure while remaining an important marketing tool.
If your business hosts customer posts, publishes content, or responds publicly to reviews, consider specialized coverage such as Internet Content Providers Insurance to help manage the risk.
What if a customer makes a libelous comment on your website blog about a competitor? Are you responsible?
What if an employee makes a libelous comment in response to a customer? Is your business responsible?
What if a customer libels another customer on your blog? Are you responsible?
The possibilities are many, but avoiding Internet marketing entirely is not a practical option for most businesses, even if you follow best practices.
At minimum, you may have to defend an employee and your business in court. If a plaintiff wins, damage awards and, in some cases, punitive damages can be costly.
Defamation insurance typically covers defense costs and awards up to your policy limit, helping protect your business balance sheet and reputation.
You do need defamation insurance in today's litigious world. If you are unsure what coverage fits your operations, talk to an agent.
Frequently Asked Questions
What types of statements are considered defamation?
False statements presented as fact that harm someone's reputation may be considered defamation; context and truthfulness are key factors.
Will my general liability policy cover libel or slander?
Many general liability policies exclude certain media or Internet-related liabilities; businesses often need a specific media, professional, or content-provider policy.
Does moderating or deleting comments remove my risk?
Moderation can reduce exposure but does not eliminate the risk entirely; insurance can help manage claims that arise despite good moderation practices.
How do I find the right defamation or media liability coverage?
Discuss your online activities and third-party content exposure with an insurance professional to identify appropriate limits and policy features.