Any negative and inaccurate statement made about a person or item in writing or verbally is considered defamation. Usually, media liability and general liability plans cover allegations of defamation (although general liability policies exclude such coverage for insureds engaged in media businesses).
Property damage and physical harm are the two main things that business general liability insurance is known to cover.
That is a straightforward way to describe it, but it does not tell the whole story. This coverage has a provision called personal and advertising injury liability that addresses various business-related issues, such as defamation insurance.
That portion of the policy will be the subject of today’s discussion because it addresses some liability claims relating to defamation.
Libel and slander are collectively referred to as “defamation,” a phrase that refers to statements that harm someone else’s reputation.
When someone else publishes words or material that have seriously damaged the reputation of another person or is likely to do so, this is referred to as defamation. However, just because something is “published” doesn’t mean it needs to be in print.
Although there isn’t a single, clear-cut standard for what constitutes harm to someone’s reputation, the courts have offered a number of ideas, including any content that:
- s a person’s reputation
- reduces how highly others think of them
- causes them to be avoided or shunned and exposes them to hostility, scorn, and ridicule.
- The “severe” reputational injury criteria were added with the implementation of the Defamation Act 2013 in January 2014. Additionally, the claimant must demonstrate “severe financial loss” if it is a firm. This has led to some ambiguity regarding how the courts will apply these new standards.
There are numerous defenses that could be used (such as the fact that the statement was true, or if the author was under a special duty to make the statement).
Defamation is defined by the Legal Information Institute as a statement that harms the reputation of a third party. Libel (written words) and slander are both considered forms of the tort of defamation (spoken statements).
Four components must be present in the statement for defamation to be proven:
- The deception must be presented as fact.
- You must let someone else know that it is a lie.
- If nothing else, you must be careless.
- The target of your comment must have suffered as a result of your statement.
Libel and slander differ in that the defamation took place in a different medium. Libelous remarks or communications are always in writing. Slander, in contrast, refers to defamation that takes place verbally.
The dangers of libel have escalated as a result of people and organizations’ capacity to quickly post information online with little to no control.
We observe this in situations when new hires criticize a rival or fail to obtain permission before uploading images and certain advertisements.
The likelihood of defamation litigation increases as the globe transitions to digital technology and barriers to communication release crumble.
Defamation is covered by insurance?
Defamation can be covered by insurance, but how it does so will depend on your business.
Here are the four typical ways that a business insurance policy can cover defamation:
As was already established, the “Personal & Advertising Injury” portion of a company’s commercial general liability insurance policy is the most typical manner that defamation claims are covered for businesses.
Insurance for directors and officers
“Personal injury” coverage, which is sometimes used as an umbrella word to encompass libel and slander, is a component of several directors’ and officers’ insurance policies.
Contrary to business general liability insurance, this policy’s coverage is not standardized for defamation. You must be aware of your particular policy; if it includes personal injury protection, be sure that it also extends to people other than your board of directors.
Online Liability (Recommended)
Defamation is typically covered under the media liability part of modern cyber insurance policies. The coverage gaps created by the defamation coverage offered by the commercial general liability policy are often filled by one of these policies.
Defamation insurance is a part of the commercial general liability policy’s advertising and personal injury (PI) coverage component.
What Else Is CGL Insurance Covered For?
The average CGL insurance policy includes a wide range of coverage in addition to defamation protection, such as:
- Bodily Injury To Third Parties- This refers to physical harm, illness, or disease suffered by third parties as a result of your company’s operations, including fatalities. For instance, a consumer might slip inside your shop and shatter their hip.
- Third-party property damage is harm done to another’s property. For instance, a builder might inadvertently harm the building next to the one he is working on.
Liability for Products
- liability for physical harm (BI) or property damage (PD) sustained by a manufacturer or seller as a result of a flaw in the product they sold or made. A customer, for instance, becomes sick after dining at a restaurant
- Work performed by the insured that has been finished in accordance with a contract, completed at a single job site under a contract including numerous job sites, or work that has been used for the purpose for which it was intended. For instance, once a plumber installs a new toilet, it starts to leak and the items in the room below are damaged.
- Legal Liability of Tenants: Tenants agree to take legal responsibility for any harm they may cause to a landlord’s property that they rent or lease. For instance, a candle left burning overnight at a workstation in an asset management company results in the destruction of the entire office tower.
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