Defamation Insurance: Why and How to Get It

What do you do if you are worried about getting sued for defamation? Lawsuits can cost upwards of $30,000, depending on complexity and other factors. Even getting a lawsuit dismissed as dumb may cost thousands of dollars in attorney’s fees. So insurance is helpful—especially if you are a regular user of free speech. Targets of defamation lawsuits include spouses getting divorced, members of community organizations (including homeowners associations) speaking out, customers wishing to speak their mind on internet reviews, and businesses dealing with litigious competitors. In short, you don’t have to be a journalist to be worried about defamation lawsuits. And lawsuits are uncertain. Even when you are in the right, a judge or a jury may see the situation differently. So there should be some way to insure against this risk—and there is: homeowner’s insurance, renter’s insurance, commercial general liability policies, and cyber policies. But not all such policies provide coverage. Only some do. If you are covered, you are protected not only from a possible money judgment against you, but the insurance company would also pay your legal expenses. If you are an individual, review your homeowner’s policy or renter’s policy. Look to see if you have personal injury coverage. If you do, you may have some coverage. If you do not, and you are worried about defamation lawsuits (and related types of lawsuits—e.g. invasion of privacy, false arrest, malicious prosecution, interference with contractual relations), contact your insurance agent. Ask them about a personal injury endorsement. If they don’t know what you are talking about, find a new agent. If you are a business, examine your commercial general liability (CGL) policy. CGL policies typically include coverage for advertising injury and personal injury (AI/PI), but this coverage generally does not apply to insureds “in the business of advertising, broadcasting, publishing or telecasting.” A supplemental cyber insurance policy might provide additional coverage for businesses, but even businesses armed with both cyber insurance and CGL may face defamation lawsuits without the aid of their insurance carrier. If you think you might have insurance coverage from a defamation claim, report the claim to your insurance carrier as soon as possible. If you receive a demand letter, a cease and desist letter, or lawsuit papers, contact your insurer. If you hear from the grapevine that someone is trying to sue you for defamation, contact your insurer. The insurer may provide you with legal counsel immediately. You would not get me, but you would be getting legal representation at hardly any cost to you (there’s still deductibles and increased premiums). If you have the misfortune of reading this without insurance in place, contact me. We will discuss a plan for a cost-effective and robust defense.