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 you post responses? 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 grown familiar, thanks to the Internet and responsible insurance agents advise clients at risk to get the coverage.
What is Defamation?
Defamation is a tort (wrongdoing) that harms the reputation of an individual. Many states have rulings that the defamation is often unintentional and not designed to injure anyone’s reputation. Nevertheless, states also recognize the claims made for negligent or reckless defamation.
Libel means written defamation, and slander is oral or spoken defamation. In a business setting, if a clerk falsely accuses a shopper of shoplifting and is heard by others making the accusation may have committed libel (unless the goods are found on their person). Libel is a written statement that is untrue.
The only absolute defense against defamation is the truth. The exception is if the defamatory statement is about a public figure. Then there is a higher bar for winning a lawsuit. The plaintiff must prove that the statement is a known falsehood to the writer and made with actual malice. This protection was for the benefit of journalists who wrote unflattering but truthful pieces about public figures.
If your business, an employee, or you are defendants in a slander or libel action, it is almost a certainty that there will be costs associated with defending you.
Why do you need Defamation Insurance?
As in the example above, statements made publicly and are untrue can bring a slander lawsuit against your employee, you as the owner, and the business as an employer.
However, the advent of social media makes the risk greater, yet not risky enough to ignore the marketing value of an online presence. There are many of what ifs.
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 endless but not using Internet marketing techniques is not an option — even if you follow best practices.
At least, you may go to court and need to defend your employee and your business. If the plaintiff wins the case, the damage award can be costly, and some states allow for punitive damages.
Defamation insurance covers the cost of defense and the damages and punitive awards up to your policy limit.
You do need defamation insurance in today’s litigious world.