Defamation insurance

Often included as part of a general liability insurance policy, defamation coverage protects your small business against personal and advertising injuries.

Personal injuries are acts violating a person’s or business’s rights, such as:

• Libel
• Slander
• Copyright infringement
• Invasion of privacy
• False arrest
• Wrongful eviction

Advertising injuries are acts that hurt businesses or individuals through ads, this can include false advertising. Remember that if your social media ad slanders a competitor, they could sue you for personal and advertising injury.

Many small business owners leverage social media to advertise and attract new customers. While this gives you greater reach, it also increases the risk of defamation accusations.

To protect your company from an expensive defamation lawsuit, it’s important to understand what defamation looks like. For example, knowing the difference between libel and slander could prevent you or an employee from posting false statements on social media.

Libel often involves false, defamatory statements someone makes in writing. For instance, a restaurant owner posts ads inaccurately claiming that a competitor exposes customers to toxic chemicals, harming the other restaurant’s reputation and business.

Slander occurs when someone makes false, defamatory statements verbally. For example, a car dealership salesman shares videos falsely accusing a competitor of selling vehicles with faulty airbags, causing damage to the other dealership’s prominence and profitability.

In addition to libel and slander, general liability coverage protects against claims of:

• Third-party bodily injury
• Third-party property damage
• Product liability

Even if you’re not at fault, a defamation case can cost your small business a lot of money for a solid legal defense. With a general liability policy, your insurance company will cover all related expenses, such as:

• Legal fees
• Court costs
• Settlements and judgments

If you own a media business, such as a publishing company, advertising agency, or online publication, it’s important to understand that general liability insurance often excludes coverage for advertising injuries.

In this case, you’ll need to buy media liability insurance, which is a type of professional liability insurance (also known as errors and omissions (E&O) insurance). This policy covers claims for:

• Advertising injuries, including libel and slander
• Copyright infringement and intellectual property (IP) infringement
• Work mistakes and oversights
• Missed deadlines
• Invasion of privacy

Web developers, app developers, and other tech companies that build websites, apps, and other content should make sure their technology errors and omissions insurance (tech E&O) policy includes coverages for media liability claims.

The short answer is no. But you can add personal injury coverage to your homeowners policy as an optional endorsement. Personal injury coverage protects you against claims of:

• Libel
• Slander
• Defamation of character
• False arrest
• Malicious prosecution
• Wrongful eviction

Let’s say your spouse posts false claims about a local political candidate or other public figure on social media, damaging that person’s reputation and causing them to lose their job. If they sue for libel, a personal injury endorsement is a relatively affordable way to protect yourself against claims that tend to deliver hefty financial losses.

Keep in mind, the defamatory incident must be an honest mistake. Most personal injury policies have exclusions for intentional acts. For instance, if your spouse knew the information they were posting was false, your policy wouldn’t cover their legal fees.

If you’re sued for defamation, having the right insurance coverage is a crucial part of a small business’s protection plan. Although you can’t litigate-proof your company, you can focus on proactive steps to lower your risk of lawsuits:

Providing regular training for your employees is key. From core principles to social media tips, when people have a clear understanding of what defamation looks like, they can take greater steps to prevent it.

There's a good chance someone on social media, online review sites, or other platforms might be discussing your business. Keep an eye on what they’re saying so you can respond to false or defamatory information before it spreads.

Whether your business interacts with customers on social media, on the phone, or face-to-face, it’s important to establish clear communication guidelines when employees are representing your brand.

Provide quality products and services, connect with customers, express gratitude for positive reviews, and respond professionally to the not-so-positive ones. Building a solid reputation can help counteract statements that may be harmful to your business.

Ready to find affordable general liability policies and other insurance products for your small business? Apply for free insurance quotes today from top-rated providers across the U.S.

Our insurance agents are here to answer any questions you might have about policy options. Once you pick your policy, you can typically receive coverage and a certificate of insurance (COI) within 24 hours.