Wednesday, May 6, 2009

Insurance for Social Media Users Like Bloggers, and Twitterers?

I was reviewing posts on social media issues and ran across an article about the lawsuit for defamation against Courtney Love based on her tweets. The article is here: Tweet This: You’re Being Sued. At first I thought that the article was a bit late in discussing the first lawsuit related to Twitter. However, the article did raise an interesting issue—general liability insurance.

Not too long ago, I was at the Denver Twestival raising funds across the country on the same night to put fresh/clean water wells in Ethiopia and I was talking with @eclewis when she mentioned she was considering the possibility of getting insurance for her blog. I had never heard of insurance specifically for a blog so I was not much help. The best I could do was suggest that I suspected the usual legal malpractice insurance policy probably covered it as Elizabeth (like me) is an attorney blogging on legal issues. I never checked specifically as each policy is different and I never asked to check through her policy, but it seemed plausible.

Now, after reading the article from the Financial Times website , I realized that on top of professional liability policies which might be in place, a personal general umbrella liability insurance probably covers defamation claims arising out of social media activities. At least, in my formal life as an insurance defense attorney, I recall that most general liability and umbrella policies specifically covered defamation claims.

worried small While it seems likely that umbrella policies cover defamation, I doubt that insurers have taken into account the rapidly increasing use of social media to determine whether they are charging the right premium, or that the risks are covered properly. Specifically, it would seem that the policy language in place is based on the usual expectation of risk for an average person of defaming someone rather than the potential increased risk now associated with the widespread use of social media. In fact, it seems likely that with more people engaging in social media, and with the expansive impact of the media (any post or comment is generally available to anyone with access to an internet connection), there is a heightened risk of defamation claims against persons previously unlikely to be at such risk.

Accordingly, I suspect insurers will either start charging more, or start excluding defamation claims taking place over social media. My bet would be that the policies will be changed to exclude defamation claims arising out of social media activities with an option for the insured to bus a rider (an addition to the policy) which specifically covers such risks for an added premium cost.

The good news is that, at least in Colorado for commercial liability coverage, and likely in most jurisdictions, under statute, insurers have to notify their insureds of changes to Mail Smallthe coverage being provided before the changes take place. This also likely applies under common law for personal liability coverage under general contract rules that a party cannot agree to a change without being able to agree to the change which implies notice of the change. That is partly why one might get a few extra pages with modified policy language in the mail from their insurer regarding their coverage now and again.

One thing that should be noted is that most people do not have umbrella liability policies even though they are fairly inexpensive and can often be built on top of one’s auto, homeowner, and/or lease coverage. If you have assets, or plan to have assets in the near future as an individual, a personal umbrella policy for liability is a good idea for consideration.

Of course, the best thing for bloggers to do is to be aware of the risk of defamation and consciously avoid posting potentially defaming content. This is generally a common sense issues.

Regardless, it would be wise for bloggers to consider examining their umbrella or professional liability insurance policies to determine where they stand. It might even be a good idea for companies and individuals with a web presence to hire an attorney to give them a solid opinion on what their policies cover and their risks. I, for one, am going to check my own personal umbrella policy and my malpractice coverage so that I am not caught unawares.


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