What is Defamation Insurance and Do I Need It?

Facing a defamation lawsuit can result in significant legal expenses, even when the claims lack merit. Many individuals do not realize that their existing insurance policies may already provide coverage for these costs.

Understanding defamation insurance is important for anyone who publishes content online, operates a business, or communicates publicly. This guide explains what defamation insurance is, whether your current policies provide coverage, and when you may need to purchase additional protection.

Understanding Defamation: The Basics

Before discussing insurance coverage, it is essential to understand what defamation actually is.

Defamation is the communication of a false statement that harms the reputation of an individual, business, or organization. Defamation falls into two categories: libel, which refers to written or published defamatory statements, and slander, which refers to spoken defamatory statements.

In the digital age, most online defamation cases involve libel since posts, reviews, comments, and articles constitute written communications.

To prove defamation, an injured party must establish that a false statement was published or communicated to a third party, the statement caused reputational harm, the statement was made with negligence or actual malice (depending on whether the plaintiff is a private individual or public figure), and the statement was not protected by privilege or another legal defense.

A statement is considered defamatory if it damages someone’s reputation, lowers their standing in the community, or causes others to avoid associating with them. When determining whether a statement is defamatory, courts analyze the statement in its entirety, not just the allegedly defamatory portion. Courts consider the ultimate effect the statement had on third parties and whether a reasonable person would believe the statement to be true.

Does Your Current Insurance Cover Defamation?

Many individuals already have some form of defamation coverage through their existing insurance policies without realizing it.

Most people carry standard insurance policies such as auto insurance, homeowner’s insurance, or business liability insurance. While basic policies typically do not include defamation coverage as a standard feature, many homeowner’s and business policies offer it as part of personal liability or excess liability coverage.

Homeowner’s Insurance and Defamation

Many homeowner’s insurance policies include personal liability coverage that can extend to defamation claims. Often referred to as “excess liability” coverage, this policy provides additional limits above and beyond primary liability policies. Think of excess liability coverage as an umbrella policy where you receive extended coverage if your primary policy fails to cover something.

This coverage typically includes defense costs, which encompass legal fees and expenses to defend against defamation lawsuits, as well as settlement amounts or damages awarded in defamation cases up to policy limits. Coverage may also extend to related claims such as false arrest, malicious prosecution, invasion of privacy, and emotional distress.

If you are sued for defamation over a social media post, online review, or statement made in your personal capacity, your homeowner’s policy may cover your defense.

Business Insurance and Defamation

Business owners should review their commercial general liability or errors and omissions policies for defamation coverage. These policies may cover personal injury liability (which often includes defamation), advertising injury (defamation arising from advertising your business), or professional liability for professionals such as consultants or advisors.

Important Limitations and Exclusions

Insurance policies include specific exclusions that can void coverage for defamation claims. Understanding these exclusions is important for determining whether your policy will respond to a claim.

Knowledge of Falsity Exclusion

Defamation insurance only protects parties who acted in good faith or unknowingly published false information. If you knew a statement was false or acted with reckless disregard for the truth, your coverage may be denied.

This exclusion prevents people from intentionally publishing false statements and expecting insurance to provide protection. Insurance is meant to protect against honest mistakes and errors in judgment, not intentional misconduct.

Business Activities Exclusion

If you make defamatory statements about a competitor, contractor, or business partner for economic gain, your personal homeowner’s insurance likely will not cover you. These situations typically fall under business insurance, which has its own coverage terms and exclusions.

Intentional Acts Exclusion

Many policies exclude coverage for intentionally harmful acts. However, courts have recognized that defamation can involve either intentional conduct or negligence (an honest mistake). If a lawsuit alleges you acted recklessly or negligently rather than intentionally, you may still have coverage even with an intentional acts exclusion in your policy.

What Defamation Insurance Typically Covers

When applicable, defamation insurance typically covers legal defense costs, including attorney fees, court costs, expert witnesses, and litigation expenses. Coverage extends to both libel and slander claims, meaning both written and spoken defamation. The policy may also cover settlement or judgment amounts awarded to plaintiffs up to policy limits.

Related personal injury claims, such as false imprisonment, malicious prosecution, and invasion of privacy, may also be covered. Some policies cover emotional distress claims, including mental anguish and reputational harm.

It is important to note that defending a defamation lawsuit can be expensive. Insurance coverage can protect you from significant financial consequences even when you ultimately prevail in the case.

Special Considerations for Journalists and Content Creators

If you are a journalist, blogger, freelance writer, podcaster, or content creator, standard homeowner’s or general liability insurance is generally not sufficient to protect you.

Why Journalists Need Specialized Coverage

Journalists face unique risks in their profession. Many media organizations require freelancers to sign contracts that indemnify the publisher against legal action, leaving journalists personally liable for lawsuits. Journalists regularly publish content about public figures, controversial topics, and matters of public concern, which can increase the risk of defamation litigation.

Additionally, standard liability policies often exclude coverage for professional services or business activities, which can include journalism and content creation. This creates significant coverage gaps for working journalists and content creators.

A Real-World Example

In 2017, journalist Yashar Ali was sued by Fox News host Eric Bolling for over $50 million over a HuffPost article. While HuffPost agreed to cover Ali’s legal costs, many journalists are not so fortunate. Freelancers and independent contributors often find themselves personally responsible for defense costs when litigation arises.

Media Liability Insurance: Essential Coverage for Journalists

Journalists, bloggers, and content creators should consider purchasing media liability insurance (also called media perils insurance or media professional liability insurance). This specialized coverage provides protection specifically tailored to the risks of publishing and content creation.

Media liability insurance should provide comprehensive defense costs. Defamation lawsuits can be expensive to defend, even when they are frivolous. Media liability insurance covers legal fees, allowing you to mount a proper defense.

The policy should cover media-specific claims, including libel and defamation, invasion of privacy, copyright and trademark infringement, errors and omissions in published content, and misappropriation of ideas.

Global coverage is another important consideration. Libel tourism refers to the practice where plaintiffs file lawsuits in jurisdictions with plaintiff-friendly defamation laws. Global coverage protects you from lawsuits filed in foreign jurisdictions.

Journalists should seek occurrence-based policies rather than claims-made policies. Occurrence policies provide coverage for any incident that occurs during the policy period, regardless of when a lawsuit is filed. This is important for journalists because defamation lawsuits are often filed months or years after content is published. Claims-made policies, in contrast, only cover lawsuits filed while the policy is active.

Some insurance policies include a provision sometimes called a “hammer clause” or “consent to settle clause” that penalizes you for rejecting settlement offers the insurance company recommends. It is advisable to avoid policies with this provision so you maintain control over whether to settle or continue fighting a case.

Common Defenses to Defamation and Their Relevance to Insurance

When you purchase defamation insurance, you are essentially paying for legal representation that will raise defenses on your behalf. Understanding common defenses helps you evaluate whether a claim against you has merit and whether your insurance will provide coverage.

Truth

Truth is an absolute defense to defamation. If a statement is substantially true, it cannot be defamatory, even if it harms someone’s reputation. The statement does not need to be literally true in every detail. As long as the gist or substance is true, the defense applies.

Opinion

Statements of pure opinion are generally protected by the First Amendment and cannot form the basis of a defamation claim. However, opinions that imply false facts may still be actionable.

For example, “I think John is a terrible manager” would typically be considered a protected opinion. In contrast, “John embezzled funds from the company” constitutes a statement of fact that would be defamatory if false.

Privilege

Certain communications are protected by privilege, meaning they cannot give rise to defamation liability regardless of whether they are true. Privilege protects statements made in legislative or judicial proceedings, communications between spouses, reports of official government proceedings, and statements made by executives within a company for legitimate business purposes. Privilege exists to further public and legal policy by protecting certain persons, officials, classes, and groups from liability.

Public Figure and Actual Malice

Public figures and public officials must prove actual malice to win a defamation lawsuit. Actual malice means the defendant knew the statement was false or acted with reckless disregard for the truth. This is a higher standard than private figures must meet, and it provides protection for journalists and commentators discussing matters of public interest.

When to Consider Purchasing Additional Defamation Insurance

You should consider purchasing dedicated defamation insurance or increasing your existing coverage if you work in media or journalism (including blogging, podcasting, or social media content creation), own a business that regularly publishes content or marketing materials, manage online reviews or reputation for your business, serve on a board of directors or in a leadership role where you make public statements, are involved in controversial or high-profile matters that could attract litigation, or have significant assets to protect from defamation judgments.

How to Check Your Current Coverage

Do not wait until you are sued to discover whether you have defamation coverage. Review your insurance policies and look for personal injury liability, personal liability, or excess liability provisions in your homeowner’s or business insurance.

Contact your insurance agent and ask specifically whether your policy covers defamation, libel, and slander claims. Even if you have coverage, check the policy limits to ensure they provide adequate protection. Read the exclusions carefully to understand what circumstances would void your coverage.

For Ohio residents, the Ohio Department of Insurance provides resources for locating agents, policies, and insurance companies that offer specialized coverage.

What to Do If You Are Sued for Defamation

If you receive notice of a defamation lawsuit, take the matter seriously and do not ignore it. Failing to respond to a lawsuit can result in a default judgment against you.

Contact your insurance company immediately and notify them of the lawsuit as soon as possible. Most policies require prompt notification. Do not admit liability or discuss the case with anyone other than your attorney. Let your insurance company and attorney handle communications.

Preserve all evidence by saving copies of all relevant communications, posts, emails, and documents. Even if your insurance provides defense coverage, consider consulting with your own attorney to understand your rights and ensure your interests are adequately protected.

The Other Side: Suing Someone With Defamation Insurance

If you are the victim of defamation and considering legal action, it is important to know whether the defendant has insurance coverage.

If a defendant has defamation insurance, their insurance company will fund their legal defense and potentially pay any settlement or judgment. This makes it more likely you will actually recover damages if you win your case.

However, insurance coverage can also affect litigation dynamics. Insurance companies have resources to fund vigorous defenses and may be more willing to fight cases rather than settle quickly.

Before filing a defamation lawsuit, consider whether your primary goal is financial compensation (in which case insurance makes recovery more likely), quick content removal (in which case litigation may not be the fastest path), or holding someone accountable (in which case insurance may shield the defendant from feeling personal financial consequences).

How Minc Law Can Help

At Minc Law, we understand the impact defamatory content can have on your reputation, business, and livelihood. While we primarily represent victims of defamation rather than defendants, we have experience navigating defamation insurance issues.

For Defamation Victims

If you are facing false and damaging online content, we can evaluate your situation and determine whether the content is truly defamatory and whether legal action is appropriate. We work to remove defamatory content by taking down false posts, reviews, and articles through legal and strategic methods.

We assess whether defendants have insurance coverage, which affects litigation strategy and the likelihood of recovery. When necessary, we pursue accountability and hold wrongdoers responsible through litigation.

Whether you need defamatory content removed or want to hold someone accountable for false statements, Minc Law is here to fight for you.

Contact us today for a free, no-obligation case evaluation by calling (216) 373-7706 or filling out our online contact form.

Our Northeast Ohio-based firm represents clients nationwide in internet defamation, libel, and online reputation matters. Let us help you reclaim your reputation and move forward.