Posted by Eugene Volokh:
Bloggers -- You May Already Have Blogging Libel Insurance,
but you might have lost it by having ads or a tipjar.
This surprised me, too, but it seems to be so. Here are the details.
(Thanks to Kurt Opsahl of the Electronic Frontier Foundation for first
suggesting this point, and to my wife Leslie Pereira 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 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 blog is entirely noncommercial -- you neither have ads nor
solicit donations for a tip jar, and you don't systematically use your
blog as primarily promotion for your business -- then you should be
covered for libel lawsuits arising out of your blog posts, because the
blogging 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 (as best I
can tell, Georgia, Indiana, Minnesota, Mississippi, North Carolina),
even a blog that makes some money will be covered if blogging 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 blogging, 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 blogging 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, especially because libel lawsuits against bloggers are
thankfully rare, and 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?
1. Read your insurance policy. As I said, it may not be a hard read.
Pay close attention to all the sections, to see if there might be
some unexpected exclusion that may apply. Also pay close to
attention to the definitions section, since some terms may be
defined in counterintuitive ways.
2. Immediately notify your insurance company, in writing, that there
might be a claim against you; send them 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 them 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.
Always communicate in writing, keep copies of all communications,
and date all your communications. You can also call them
(particularly important if you need to nag them), but confirm any
substantive communications in writing.
3. 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.
4. 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.
If they don't tell you quickly, 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 them to pay the
bills. Bug them 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.
5. 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 blogging, (2) you might lose it,
depending on the state you're in, if you sell ads, have a tipjar, or
otherwise make even small sums of money from your blog, (3) you may
therefore want to plan your blog financing 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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