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You May Already Have Libel Insurance for Your Posts

But you might lose it if you make even a small amount of money for posting (e.g., get advertising revenue from your blog).

I blogged about this years ago, but I thought I'd repeat it, partly prompted by a couple of recent queries on the subject. (Thanks to Kurt Opsahl of the Electronic Frontier Foundation for first suggesting this point, and to my wife for her advice on insurance law. Please note, though, that I'm not an insurance lawyer, though I've done a bit of research on this subject. Don't take this to the bank, and do let me know if you are an insurance lawyer and have some corrections. Consider this general speculation about the lay of the land, and not individualized legal advice.)

[1.] It turns out that homeowner's insurance policies, and possibly also some renter's insurance policies, generally cover libel and invasion of privacy lawsuits. That may sound odd, but the policies tend to cover both damage to your property (the main reason, I suspect, that most people buy these) and liability for unintentional harm that you inflict on others. One policy that I read, for instance, says that

If a claim is made or a suit is brought against any insured for damages because of bodily injury . . . caused by an occurrence to which this coverage applies, we will:

  1. pay up to our limit of liability for the damages for which the insured is legally liable; and
  2. provide a defense at our expense by counsel of our choice even if the allegations are groundless, false, or fraudulent....

POLICY DEFINITIONS ...

"Bodily injury" means; ... personal injury ... arising out of ... libel, slander or defamation of character; or ... invasion of privacy.

If you have an umbrella liability policy, it may provide extra monetary coverage. Of course, you're only covered if your insurance contract does indeed specify this, explicitly or implicitly. You ought to read your policy (they are often quite readable), and pay close attention both to the body of the policy and any separate definitions section.

[2.] These policies generally don't cover punitive damages, but they do cover both compensatory damages and litigation defense costs. Fortunately, that's what you most want to have covered.

Libel cases are hard for plaintiffs to win, and punitive damages are especially hard to get. If you're writing on matters of public concern, and are sued for libel, you can't be liable for punitive damages unless a jury finds that you knew your statement was false or at least knew it was quite likely false but blithely published it without any investigation. So chances are you won't be on the hook for punitive damages, or even for compensatory damages.

But even if you win, you could spend huge amounts of money defending yourself. That's where the insurance can be especially handy.

[3.] However, these policies generally explicitly exclude liability related to "business pursuits." The exclusion and the definition of "business pursuits" may vary from policy to policy, so check yours (and again check both the homeowners' insurance and your umbrella policy, if you have it). Still, I'm told that most policies just say "business pursuits," and sometimes define them as referring to a "trade, occupation, or profession."

If your commenting, blogging, or other posting is entirely noncommercial — you don't sell ads or solicit tip jar donations, monetize your Youtube videos, or systematically use your blog, Facebook page, or Twitter feed as primarily promotion for your business — then you should be covered for libel lawsuits arising out of your posts, because the posting wouldn't be a business pursuit. (Possible exception: If your primary occupation is a professor or a journalist, then even noncommercial posting on topics related to your specialty may conceivably be seen as part of your main occupational "business pursuit"; I know of no precedents one way or the other about this.)

But if you make some money out of it, even a small amount, then in many states you probably won't be covered. In a few states (when I last checked, Georgia, Indiana, Minnesota, Mississippi, and North Carolina), even posting that makes some money may be covered if it isn't your primary occupation. In Arkansas, Idaho, Louisiana, and Michigan, you might be able to get coverage on the theory that making money wasn't your primary motive in posting, and that you were instead doing it as a hobby with money being only a side consideration. Still, the majority view, as I understand it, is that any moneymaking component (so long as it's regular, rather than just one-time or highly intermittent) makes your posting into business activity and thus excludes it from coverage. This isn't entirely clear, but that's my sense from reading some cases and a couple of reference works.

[4.] This means that if you're worried about the risk of libel lawsuits, you might want to consider staying entirely noncommercial. Naturally, you wouldn't have to do it if you live in a state which reads the "business pursuits" exception narrowly. (Most homeowner's insurance policies, I'm told, don't have a separate provision indicating what state law would be used to interpret them, so courts would generally apply the law of where you live.) And if you figure that you'll make lots of money from the ads or the tip jar, you might be willing to run the risk, because you might think that your posts would be unlikely to trigger a lawsuit.

But if you think that having libel insurance will let you sleep better at night, you might conclude that it's better to forego, say, $500 worth of advertising income in a year in order to remain insured.

[5.] What should you do if you get a threatening letter?

[A.] If you do think your policy covers libel, or think that it might, immediately notify your insurance company, in writing, that there might be a claim against you. Send the company a copy of the nastygram you received, and a dated cover letter. Tell the company that you need to consult a lawyer to deal with the threatening letter, and ask it to get you a lawyer right away, or to authorize you to consult one yourself on their dime. The insurance company may not have an obligation to pay your lawyer's bills until the lawsuit is filed, but it doesn't hurt to ask.

I'm told that you can usually do the notification through your insurance broker, who knows how to deal with the company, and whom to talk to there. In any case, talk to your broker and see whether he'll do the notification for you or whether you ought to notify them yourself.

[B.] Always communicate in writing, keep copies of all communications, and date all your communications. You can also call the company or the broker (particularly important if you need to nag them), but confirm any substantive communications in writing.

[C.] If the other side's gripe with you is sound — if you did indeed err — post a correction. It's the right thing to do, and it may avoid a lawsuit.

[D.] If a Complaint is filed against you in court, notify the insurance company about that, too, by sending them a copy of the Complaint with a dated cover letter. Demand that they get back to you quickly about whether they're hiring a lawyer on your behalf.

[E.] If the insurance company doesn't get back to you quickly with an answer, hire a lawyer yourself, and show him a copy of the insurance policy. Then inform the company that you've hired the lawyer, and that you expect the company to pay the bills. Bug the insurance people repeatedly, if necessary, including through your insurance broker. If your policy covers libel, and you aren't within the business pursuits exclusion, you likely have a very strong case for coverage; but they can still be slow, and you need to be the squeaky wheel.

[F.] If you do hire a lawyer, show him the policy, and negotiate with him in light of the policy. See if he would agree to represent you for rates that he's pretty sure the insurance company would pay. See if he would agree not to charge you if the insurance company denies coverage. That, of course, depends on his sense of how likely coverage seems to be. But cyber-libel cases are potentially pretty interesting, even glamorous. Some lawyers may be willing to take a small risk of nonpayment to do a fun case like that.

* * *

In any case, these are just a few thoughts; use these numbers for comparison, your mileage may vary. But keep in mind that (1) you may already have libel insurance for your posting, (2) you might lose it, depending on the state you're in, if you run a blog and sell ads or have a tipjar, or otherwise make even small sums of money from your posting, (3) you may therefore want to plan the financing for your posting accordingly, if you're the worrying sort (or for that matter the libeling sort), and (4) if you are sued or threatened with a lawsuit, look carefully at your insurance policies, notify your insurance company immediately and in writing, and bug them repeatedly for an answer.

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  • Robert||

    Best thing: Don't write anything bad about anybody. You'll actually be happier for not doing so.

  • nonzenze||

    Do you think a society that doesn't critically engage is really happier?

    Does expelling conflict from the public sphere get rid of it or push it elsewhere?

  • OtisAH||

    If your "critical engagement" with others requires you to brush up against libeling others, you're doing it wrong.

  • Rossami||

    You are assuming, OtisAH, that the accusation of libel was substantiated. It takes basically nothing to get accused of libel.

    Personally, I would be disappointed in a world so conflict-averse and self-censoring that there was no risk of even a false accusation. My mother's advice that "if you can't say something nice, don't say anything" is great for keeping peace within the family but really crappy advice for making change in the world.

  • Robert||

    If the world were that nice, why would you want to change it?

  • Eidde||

    You know what I think about the Church of Scientology? They're a bunch of (redacted) sons of (redacted) and the like to (redacted) with (redacted).

  • Eidde||

    And as to litigious celebrities, let me tell you what I think about them: (redacted) (redacted) (redacted)

  • DjDiverDan||

    "Consider this general speculation about the lay of the land, and not individualized legal advice.)"

    In other words, remember that free legal advice is always worth exactly what you pay for it.

  • Purple Martin||

    Actually, it's often worth far less than that. Not this comment though.

  • Peter Gerdes||

    Out of curiosity to what extent does the insurance company get to control your defense strategy? Suppose you post a non-libelous post and someone sues you to intimidate you into taking it down and offers to settle in exchange for removing the post and posting an apology. Can your insurance company demand you take the settlement or continue on your own dime?

  • Beldar||

    Your policy assuredly contains a contractual commitment to cooperate with the insurer and the counsel it selects, pays, and instructs to defend you. If your insurer chooses to pay a nuisance value to settle your claim and, as a result, gets you entirely out of civil jeopardy as a result of that, your only recourse would be to breach that contractual commitment and resume control of your defense on your own (or with lawyers paid for by your own money).

  • Bob from Ohio||

    I think he is asking if the insurance company can make you do something you do not want to do.

  • Beldar||

    No, it can't make you, but it can effectively impose huge costs and risks on you as a consequence of your refusal to go along with its decisions about the case.

    Ultimately, as I said, you have the right to replace the insurance defense lawyer hired by the insurer and to make the decisions about the defense, settlement, or trial of the case on your own.

    But by doing so, you will thereby be breaching your duty to cooperate, which in turn will excuse the insurer from both its duty to defend and its duty to indemnify.

  • Peter Gerdes||

    So in short, if what you are worried about is people using lawsuits to force you to remove posts or post retractions the insurance doesn't really do much for you.

    The insurance might protect you from losing your house if you say something stupid but won't help you defend your free speech rights against takedown demands.

  • Beldar||

    When you're sued, if you don't mount a proper defense (which few laymen are capable of doing on their own), default judgment will be entered against you. Having a lawyer at the insurer's expense to defend you, instead of having to pay thousands and even tens of thousands to defend yourself, is a BIG DAMNED DEAL, so I emphatically deny that "insurance really doesn't do much for you."

  • Peter Gerdes||

    And I should have added: Thanks for the info.

  • TwelveInchPianist||

    Does the "duty to cooperate" include removing a post that you believe to be accurate, or saying that you're sorry when you're not? It seems like that kind of defeats the purpose of the policy, at least to the extent that it gets you out of civil jeopardy for stuff you did before the insurance company got involved.

  • Beldar||

    The answer to this question might vary state to state, and of course also depends on whether the specific policy includes any obligations on the part of the insured beyond the insured's general duty to cooperate.

    But I think in general, courts are going to be reluctant to impose affirmative duties on the insured beyond things like making himself available for interview, cooperating with pretrial discovery (including showing up for deposition and trial), keeping secrets confidential and going only through the lawyer hired by the insurer (rather than trying to work around that lawyer), and so forth.

  • TwelveInchPianist||

    That makes sense. Thanks.

  • Rossami||

    Most insurance policies have an exclusion for "intentional criminal acts". So if you believe your post to be accurate and defensible but the insurance company thinks that it actually is libel, the insurance company may have the right to stop paying for your defense at the point of that determination. (State-specific insurance regulations apply about who gets to make the determination, how and when that determination gets made, how that affects the expenses-to-date and what happens if a court later finds the other way.)

    They still can't make you take down your libelous post but you might be on your own for defense. But this is no different from the way they would treat the coverage of your house fire once they discover evidence of your arson or the way that your auto-accident claim would change once the results of the black box analysis comes in revealing that you were driving 120 mph through a school zone.

  • SykesFive||

    Sort of.

    The exclusion is usually for "intentional or criminal acts."

    In every United States jurisdiction of which I'm aware, it is possible to commit defamation torts such as libel through negligence or recklessness, which fall short of intent.

    The insurer's coverage decision should not be based on whether the insurer thinks your acts were intentional. Rather it should be based on what the plaintiff alleged in the complaint. If the plaintiff only alleged that your defamation was intentional, then the insurer may be able to avoid coverage. If the plaintiff included any claim that would be covered, such as a negligent version of defamation, then the insurer would probably have to cover. This is because, again in every United States jurisdiction of which I'm aware, the insurer's duty to defend is considered broader than the insurer's duty to indemnify. This means that the insurer has an obligation to defend you if there could be coverage on any claim, even if the claims on which the plaintiff actually prevails don't trigger coverage.

    The plaintiff will likely want you to be able to access insurance coverage, because this increases the likelihood of recovery, so will plead a negligence theory. Also, negligence is much easier to prove! In addition, most state courts will hold that the insurer has some duty not to defend case in a self-interested manner by concentrating only on the defense of the covered claims and then leaving you all alone.

  • Beldar||

    No, it can't make you, but it can effectively impose huge costs and risks on you as a consequence of your refusal to go along with its decisions about the case.

    Ultimately, as I said, you have the right to replace the insurance defense lawyer hired by the insurer and to make the decisions about the defense, settlement, or trial of the case on your own.

    But by doing so, you will thereby be breaching your duty to cooperate, which in turn will excuse the insurer from both its duty to defend and its duty to indemnify.

  • Beldar||

    Apologies for the double-posting(s). Apparently there is some variable delay in how long it takes for comments to show up here.

  • Intelligent Mr Toad||

    Is a defecation-of-character lawsuit covered?

  • MatthewSlyfield||

    "defecation-of-character"

    Isn't that where lawyers come from?

  • DjDiverDan||

    According to the creators of South Park, that's where Bono came from (or, if you are a stickler about never ending a sentence with a preposition, from whence Bono came.)

  • tkamenick||

    If you're being a stickler, "whence" doesn't need "from" because "whence" means "from where"

  • Beldar||

    Speaking as someone who frequently represents both plaintiffs and defendants in defamation cases, I confirm that this is useful and accurate general advice.

    The only thing I'd change or add would be a short discussion of the two distinct duties owed by the insurer: The duty to defend, and the duty to indemnify. Because defamation claims are fiendishly complicated, mixing state and federal law, and because they're so often grudge matches, they can be incredibly expensive to defend even if the underlying claims are completely bogus, and those legal fees & expenses tend to be front-end loaded.

    The duty to defend includes paying the defense lawyer, but in discharging that duty the insurer gets to pick the counsel to represent its insured; that counsel will typically be a lawyer who's regularly hired by insurers and who may therefore have potential conflicts of interest. In that situation, depending on the stakes and the likelihood of an uninsured portion of the verdict (e.g., for punitive damages that are excluded under the policy, or for actual damages above policy limits), the defendant may want to have his own independent counsel monitoring the insurance defense counsel's work so he can provide unconflicted, independent advice.

  • SykesFive||

    The duty to defend is held by nearly all courts to be broader than the duty to indemnify, so the insurer will probably end up defending the entire lawsuit even if some of the claims are outside coverage.

  • Beldar||

    If you're a blogger, going fully noncommercial may also enhance your ability to use and rely upon "fair use" as a defense to any copyright/IP claims as well.

  • MightyMouse||

    You mean to say if I get into trouble on this blog you won't be springing to my defense?

  • MightyMouse||

    OP/scarcasm

  • ||

    Speaking as someone who regularly represents policyholders and insurers in coverage and bad faith cases, I also affirm or echo Beldar's posts. Also, if you tender your claim to your insurance company and then get a letter from your renter's, homeowners, or even commercial general liability insurance carrier which either denies your claim or states that it is "reserving its rights," take that letter to a policyholder insurance coverage lawyer. Just because you receive a letter denying coverage does not end the question of whether the insurance contract provides coverage.

    And, even though this could put a blogger into the middle of a litigation sandwich - defending against a defamation case while being the plaintiff in a lawsuit against the insurance carrier - it is not an uncommon procedural posture in the insurance coverage world.

    Also, don't immediately read the intentional acts exclusion in the insurance policy to exclude coverage for defamation, as the law is state-specific on this. Yousuf v. Colhmia, 741 F.3d 31 (10th Cir. 2014) (Judge Gorsuch on the panel).

  • Beldar||

    Agreed, and well put!

    State laws vary dramatically. Texas has a new law, for example, that imposes a complete bar to recovery of exemplary damages unless the plaintiff has requested a retraction within 90 days of learning of the publication of the allegedly defamatory statement. Texas law also draws a much more stark (and pro-defendant) distinction between fact and opinion than many other states' laws do, or than the federal version (for public figures) imposes.

    The diversity between different states' laws, and the overlying layer of partly preemptive federal law, makes these cases vastly more complicated than otherwise, meaning more expensive to litigation, and it makes the procedural posture, including venue choices, quite often outcome determinative.

  • Beldar||

    See if he would agree not to charge you if the insurance company denies coverage. That, of course, depends on his sense of how likely coverage seems to be. But cyber-libel cases are potentially pretty interesting, even glamorous. Some lawyers may be willing to take a small risk of nonpayment to do a fun case like that.

    I don't think this is a realistic expectation for most people in most situations. I get probably 20 phone calls every week from people who think they have viable defamation claims, or who've been threatened with defamation claims or sued, based on something posted online. While important to those involved, there's very, very rarely any "glamor," and glamor doesn't pay any bills or feed any lawyer's kids.

    If sued, you may be able to hire "coverage counsel" — to present your demand for coverage in its best light, in an attempt to work himself out of a job by getting the insurer to assume the defense and confirm coverage — on a flat fee basis to begin with. If you have to sue your carrier as a result, your lawyer might be willing to convert his further representation to a full or blended contingent fee, a prospect that's enhanced by the potential recoverability of reasonable attorneys' fees as part of your damages if the carrier has wrongfully denied coverage.

  • Stephen Lathrop||

    If you're writing on matters of public concern, and are sued for libel, you can't be liable for punitive damages unless a jury finds that you knew your statement was false or at least knew it was quite likely false but blithely published it without any investigation. So chances are you won't be on the hook for punitive damages, or even for compensatory damages.

    I suggest that may over-reassure online commenters with ideological propensities. From reading blog comments here, I have learned that ideologically-invested commenters sometimes take ideologically important premises as axioms, and then presume to reason their way from those axioms to arrive at facts. The standard required to get out of punitive damages in a libel suit may not stretch far enough to cover that method of discovering truth, nor excuse that kind of thinking from a charge of reckless disregard.

  • Beldar||

    A few years ago I was hired by an individual who wrote book reviews for his local newspaper on an unpaid, unassigned basis. One of his book reviews got himself and the newspaper sued as additional defendants along with the subject book's author by a Texas millionaire who believed he'd been libeled.

    The reviewer hired me on a flat fee basis for the express purpose of investigating his insurance situation, and then making a formal written demand upon his homeowners insurer that it defend and indemnify him to the full limits of his policy in accordance with its terms -- "tendering his defense," in other words. If the insurer had refused, I'd have defended him in the main suit and filed a new suit against the insurer for breaching its policy.

    However, when we'd satisfied the insurer that my client's relationship with the newspaper was indeed noncommercial, the insurer did the correct thing and hired him a lawyer with no reservation of rights letter, thereby confirming coverage and putting the insurer on the hook up to its policy limits.

  • Beldar||

    As I told both him and the insurer at the time, both my client and the newspaper were secondary defendants in the lawsuit: The real target was the out-of-state author and publisher of the book. The Texas millionaire's lawyer only sued my client and the newspaper so that there would be Texas residents on both sides of the lawsuit, thereby destroying complete diversity and preventing the author and publisher from removing the case to federal court. After a year had gone by and all removal deadlines had run, the millionaire's lawyer voluntarily dismissed both my client and the newspaper, whose respective lawyers (paid by their respective insurers) were just making things that much harder and getting in the way of his crusade against his real targets.

  • Sam Gompers||

    Does that mean I can sue Sacastro for the pain and suffering from the severe eye-rolling his comments often cause?

  • Purple Martin||

    Ouch! now I can't get my eyes to roll back down after your comment! Pain and Suffering!! Pain and Suffering!

  • rsteinmetz||

    I'd point out from personal experience how the case is framed has an impact on whether the insurer will defend you. I was once sued for negligence in a personal injury case and because the personal injury lawyer filed the suit including my failure to "maintain" the property where the alleged accident happened which I didn't own. My insurance carrier was able to tell the plaintiff's lawyer that although they accepted the "duty to defend" depending on the verdict the damages would likely not be covered. It was great. I had a very good free lawyer and not one cent for a damages. The personal injury lawyer looking across the table decided the prosecution of the suit would cost him a lot of money but the insurance company would not pay and dropped me from the case.

  • SykesFive||

    This is a very good example of the duty to defend being broader than the duty to indemnify!

  • MightyMouse||

    Would it be feasible have the blog and posts "owned" by your LLC, which can then limit civil liability?

  • Eugene Volokh||

    Good question, which I might blog about separately -- the answer is no, because you'd still be liable for your own torts, even if they were done supposedly on behalf of the LLC. Indeed, if a truck driver employed by Ralphs Supermarkets negligently hits your car, both Ralphs (on a respondeat superior theory) and the truck driver (on a direct liability theory) are liable for your injury; it's just that, practically speaking, it makes much more sense sue to Ralphs than the truck driver. Similarly, if a blogger employed by an LLC (either really employed, or just using the tactic you describe) libels someone, the blogger and the LLC are both liable.

    Limited liability is useful to protect owners from tort liability for managers' or employees' torts, and from the LLC's breach of contract. But it doesn't protect people from liability for torts they themselves committ.

  • nathan_m||

    Two additional points that are good to keep in mind:

    1. Many house insurance policies now have exclusions for use of social media. If your policy has such an exclusion you might not have coverage even if it would otherwise cover defamation.

    2. At least in Canada -- insurance coverage law is often similar in Canada and the US but it can differ -- even if your policy doesn't specifically mention defamation in the definition of "bodily injury" the wording of the policy will often be broad enough to provide coverage (or at least trigger the duty to defend, which is frequently more important) for a defamation claim anyway.

    If you have a claim and your insurer denies coverage talk to a lawyer. There are special rules about interpreting insurance policy which means often coverage is broader than would be obvious from reading a policy. It's not uncommon for an insurance company to initially deny coverage and then charge its position once a lawyer with experience in coverage disputes becomes involved.

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