Insurance

You Have Questions? CMLP Has (Tools to Help You Find) Answers.

Kimberley Isbell — Thu, 29 Oct 2009 20:17:35 +0000

"How do I get media liability insurance?" It's a question we hear a lot here at CMLP.

A lot has been written about why bloggers and other citizen journalists should consider obtaining insurance to protect themselves against liability for their online activities. But comprehensive, impartial information on the issue remains scattered and hard to find.

As a service to you, our dear readers, CMLP has attempted to remedy this problem by updating our Legal Guide content on insurance for online journalism ventures. In the guide, you will find sections on Finding Insurance, Homeowners and Renters Insurance Coverage, Evaluating Homeowners and Renters Insurance Policies, Insurance Exclusions for Business Pursuits, and Media Liability Insurance.

We've also added a brand-new feature: an Interactive Question Tool for Evaluating Your Insurance Needs. The tool takes you through a series of questions to help you determine whether your activities are covered by your existing homeowner's or renter's policy, whether separate media liability insurance is right for you, and what issues you should consider when shopping for media liability insurance.

We hope that this information is helpful. Of course, if you have additional questions that our Legal Guide doesn't answer, you can post them in our forums.

P.S. Happy 40th birthday, Internet!

Jurisdiction:

United States

Subject Area:

New Insurance Program for Bloggers Offered by the Media Bloggers Association

David Ardia — Tue, 23 Sep 2008 20:32:07 +0000

Here is a simple, but often ignored, truth: if you publish online, whether it's a news article, blog post, podcast, video, or even a user comment, you open yourself up to potential legal liability. It doesn't matter whether you are a professional journalist, hockey-mom, or an obscure blogger, if you post it, you'll need to be prepared for the legal consequences.

So how big are the legal risks? It depends on what you publish and how you go about doing so. If you publish a blog about cute cats, for example, your risks are going to be lower than they would be if you run a website focused on local police corruption. Over the next few weeks we'll attempt to quantify and analyze these risks by digging into our legal threats database, but even at this preliminary stage, we can say that the threats directed at online publishers have clearly been increasing. As the figure to the right shows, in the last 10 years, the number of civil lawsuits filed against bloggers and other online publishers have increased from 4 in 1997 to 89 in 2007.

While most lawsuits never get to trial, even frivolous suits dismissed at a relatively early stage of the litigation can be expensive to defend. Unfortunately, if you lack the money to carry out a vigorous defense, your only option may be to settle (perhaps agreeing to take down the offending content or even your entire site) regardless of the merits of your defense.

For these reasons, it is important to assess whether your online activities are covered by insurance. For most non-professionals, this means your existing homeowners or renters insurance. (If your online activities are part of an existing business, you may be able to add coverage to your business insurance policy through an add-on rider.) Keep in mind, however, that most homeowners policies exclude coverage for "business pursuits." How "business pursuits" is interpreted varies from state to state. (See the Insurance Exclusions for Business Pursuits section of our legal guide for more information.) In most states, your activities may be excluded from coverage if you earn advertising income from your site or blog or you collect money through other online means.

If your activities are not covered by your existing insurance, you should give serious consideration to getting media liability insurance. Although these policies can be prohibitively expensive, a new insurance program offered by Media/Professional Insurance called "BlogInsure" is aimed specifically for bloggers and other independent online publishers.

The new insurance, which is currently available only to members of the Media Bloggers Association (MBA), provides coverage for defamation, invasion of privacy, and copyright infringement claims. Premiums start at $450 per year for $100,000/$300,000 in coverage ($100,000 per claim and $300,000 aggregate per year) and go up from there depending on how much revenue your blog or site generates and the type of content.

Bob Cox, president of the MBA, has been working tirelessly on this issue for years and deserves a great deal of credit for putting this together. He was also instrumental in getting Poynter's News University to develop an online media law course for bloggers and other online publishers. The free course, which is required for anyone seeking to enroll in the new insurance program, launched last week. (Note: I co-authored the course with Geanne Rosenberg from the City University of New York's Graduate School of Journalism).

For more on BlogInsure, see the MBA's press release here.

Subject Area:

Highlights from the Legal Guide: Are Your Online Activities Covered by Insurance?

DMLP Staff — Mon, 25 Feb 2008 05:32:52 +0000

This is the fourth in a series of posts calling attention to some of the topics covered in the Citizen Media Legal Guide we published in January. As we roll out new sections of the guide each month, we will highlight some of the more important topics in blog posts.

In the first three posts we discussed choosing a business formfor your online activities, the issues associated with selecting aplatform for online speech, and deciding whether and how to be anonymous when publishing online. In this post we highlight the importance of insurance and help you evaluate whether your existing coverage is sufficient.

Finding Insurance

Even frivolous lawsuits dismissed at a relatively early stage of thelitigation can be expensive to defend, and the cost skyrockets thelonger the litigation continues, particularly if judgment is renderedagainst you. While most lawsuits never get to trial, if you lack themoney to carry out a vigorous defense, the only option available to you may be tosettle (perhaps even to take down the allegedly offending content or even your entire site)regardless of the merits of your defense.

For these reasons, it is important to assess whether youronline activities are covered by your existing homeowners or rentersinsurance. If your activities are not covered, it might be worthgetting media liability insurance, even if such policies initiallyappear to be prohibitively expensive. Alternatively, if your onlineactivities are part of an existing business, you may be able to addcoverage to your business insurance policy through an add-on rider.Consult your insurance agent for costs and details.

Here are a list of steps to take when evaluating your insurance coverage needs:

Carefully review your existing insurance policies to see if claims related to your online activities are covered (e.g., claims for libel, invasion of privacy, copyright infringement). Review the section on Homeowners and Renters Insurance Coverage in this guide for help in making this determination.

If your current insurance policies don't cover you, consider switching to another carrier that will provide coverage. See the section on Evaluating Homeowners and Renters Insurance Policies for guidance.

Consider whether your state's law excludes coverage for your specific activities. This is especially important if you make any money from your online activities. See the section on Insurance Exclusions for Business Pursuits for information.

If your state excludes coverage for business pursuits and you make sufficient money from your site to be excluded, carefully weigh whether the income you receive is worth the loss in coverage.

Consider whether media liability insurance might be a better option (for many, it may be prohibitively expensive, but the coverage can be quite comprehensive). See the section on Media Liability Insurance for help.

Homeowners and Renters Insurance Coverage

If you have homeowners or renters insurance, your policy may cover some ofyour online activities. Most such policies cover damages and legal feesincurred in suits against the insured for "bodily injury," and "bodilyinjury" is often defined as including personal injury arising out of defamation or invasion of privacy.Obviously, you are only covered if your insurance contract containsthis or similar language and your first plan of action should be toread your policy, paying close attention both to the body of the policyand any separate definition sections.

You should note, however, that your policy may not include coverage for copyright or other intellectual property claims, which do not typically fall within the standard definition of "bodily injury" or "personal injury" covered by most policies.

Homeowners and renters insurance policies generally cover both compensatory damagesand legal defense costs, but not punitive damages (damages awardedabove and beyond the amount necessary to compensate the plaintiff forhis or her injury). This is important because plaintiffs often seekpunitive damages in defamation suits, and the fear of large punitivedamages might prove an insurmountable inducement to settle or removecontent. On the other hand, actual verdicts (as opposed to settlements)for plaintiffs are fairly rare in these types of suits and even rarerin the case of punitive damages.

Most homeowners policies exclude coverage for "business pursuits." How "business pursuits" is interpreted varies fromstate to state. (See the Insurance Exclusions for Business Pursuits section of this guide for more information.) In most states, youractivities may be excluded from coverage if you earn advertisingincome from your site or blog or you collect money through other onlinemeans (say, through a PayPal "Donations Accepted" link on your site).If you are worried about losing coverage because you make a smallamount of money from your site or blog, you may want to considerforgoing the advertising revenues and donations.

In a few states, you might still be covered even if you make money if your online activities are not your "primary" occupation. In other states, you will need to show that your online activities are no more than a "hobby," even if you made some money from it. Note,however, that there may be adverse tax consequences from characterizingyour business as a "hobby." You should consult a tax adviser before characterizing for tax purposes any income you make from your online activities.

If your existing homeowners or renters insurance policy does not cover your online activities, you may want to consider switching carriers or purchasing additional coverage through an umbrella policy. See the section on Evaluating Homeowners and Renters Insurance Policies in this guide for a discussion of the terms and coverage of several large carriers.

Media Liability Insurance

If your online activities are not covered under your currentinsurance policies, a growing number of companies are offering medialiability insurance. While these policies are expensive -- perhapsprohibitively so for a newly formed business -- they can also be quitecomprehensive. They typically cover costs to defend against suitsbrought for:

libel, slander and defamation;
invasion of privacy (a growing concern, as suits arising from newsgathering activities are not hampered by the First Amendment concerns that make libel and slander suits difficult to win);
copyright infringement and other intellectual property-related suits; and
damages resulting from errors, omissions, misstatements or misleading statements made by you.

Media liability policies typically have a minimum coverage of $1 million andcan run all the way up to $100 million for large publishers. Thepremiums may be as low as $1,500 a month, but typically begin at$2,500. Media liability insurance is a growing business with morecompanies underwriting policies every year, so it makes sense to shoparound. Some carriers that provide policies in this area include: American International Group, Chubb Group, Media/Professional Insurance, First Media Specialists, ACE USA,OneBeacon Insurance Group, and AXIS Capital U.S. Insurance. Keep in mind that you will likely have to go through a licensed agent or broker to secure coverage from these companies.

There are several things to consider when shopping for a media liability policy:

International Coverage: Increasingly, traditional and non-traditional journalists are finding themselves sued abroad in jurisdictions more favorable to plaintiffs than the United States. If you are likely to touch on foreign issues or discuss foreign citizens in any way, you might want to ensure that your policy covers you for suits brought overseas.

Settlement: Many insurance policies include "hammer" clauses, which specify that the insurer, rather than you, gets to decide whether to accept a settlement (at the penalty of losing or drastically reducing coverage if you don't acquiesce). Because insurers are worried about their economic bottom line rather than your reputation (or good journalism, for that matter), you and your insurance company may not agree on when is a good time to settle a lawsuit. Insurance companies sometimes include clauses giving them a say in whether or not you will print a retraction (something that can limit liability or damages in many states -- please see the Overview of Retractions section of this guide for more information).

Punitive Damages: Some policies cover punitive damages and some do not. While actual awards of punitive damages against citizen journalists are likely to be relatively rare, this coverage may provide you with peace of mind and also enable you to fight rather than settle suits you believe are meritless.

Coverage Period: Some policies cover you for any claim filed against you during the policy period; others, for any claim brought against you for an incident that occurred during the policy period. The latter gives you more insurance should you discontinue your site, terminate your policy, and subsequently find yourself embroiled in a lawsuit.

Policy Limits: All policies will pay attorney's fees, but some deduct defense costs from policy limits and some do not. Because such fees can be significant, this may make a large difference in the actual coverage of your policy.

Counsel: Some policies allow you to select your own lawyer, while others do not.

Financial Security: It is important to make sure your policy is underwritten by a company that is financially secure.

Lawyer's Opinion: Some insurers require that you hire a lawyer to assess your chances of being sued and write an opinion letter to the insurer before it will underwrite a policy. The costs of this can be quite substantial.

Subject Area:

Libel Insurance For Bloggers?

David Ardia — Wed, 25 Jul 2007 21:37:58 +0000

Eugene Volokh has reposted a very useful analysis of whether homeowner's insurance policies cover libel lawsuits, entitled Blogger -- You Might Have Already Had Libel Insurance. Volokh concludes -- in my opinion, correctly -- that homeowner's insurance policies, and possibly some renter's insurance policies, generally cover libel lawsuits. While these policies don't cover punitive damages (almost all policies exclude intentional or willful conduct), they do cover compensatory damages and attorney's fees.

This is obviously good news for citizen journalists. But the picture is not quite so rosy. As Volokh notes:

[T]hese 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.

For citizen journalists, the exclusion for "business pursuits" can be very problematic. Many, although not all, citizen journalism sites are searching for a way to make money. As informal blogging morphs into a money-making pursuit, your very success will open you up to both increased liability and decreased insurance coverage.

So what to do?

First, carefully review your existing policy to see if claims related to your online activities are covered (e.g., claims for libel, invasion of privacy, copyright infringment). If your policy doesn't cover you, consider switching to another carrier that does.
Second, research whether your state's law excludes coverage for your activities. [The CMLP's forthcoming legal guide will have state-specific sections addressing this subject.]
Third, if your state excludes coverage for business pursuits and you make money from your site, carefully weigh whether the income you receive is worth the loss in coverage.
Fourth, consider getting media liability insurance; while these policies are expensive -- perhaps prohibitively so for a newly formed business -- they can also be quite comprehensive. For a list of carriers, see the Online Journalism Review's Major Insurers With Media Liability Insurance Products.

On a related note, we are collecting examples of insurance policies from different carriers in an effort to create a comparison of terms and coverage. If you would like to participate (all personal information should be removed), please let us know via our contact form.