Insureon Blog

How Commercial General Liability Insurance Can Protect You from an $82,630 Tweet

6. January 2014 15:08

Business owner juggles paper and online management resources.

A British freelance transcriber received an early Christmas present last month when one of her clients decided to drop the $82,630 lawsuit it had brought against her. The Index on Censorship reported that in October 2012, the freelancer criticized her Qatar-based client’s payment methods via Twitter, prompting the head of the company to sue her for libel.

Although the case was dropped (allegedly because the out-of-country client did not want to pay the British court’s security fee), this story illustrates that small-business owners – no matter how modest their operations – can face major lawsuits the same way any other business owner can.

Fortunately, Commercial General Liability Insurance can protect small-business owners from claims relating to personal injuries, including libel.

How Does Commercial General Liability Insurance Protect Against Libel?

Commercial General Liability Insurance is a type of small business insurance commonly associated with claims of physical damages, like when someone hurts themselves on your business’s property. In fact, GL Insurance is so often associated with business-premises injuries that it’s often referred to as “slip and fall” insurance.

But General Liability Insurance can also protect your business from third-party claims of non-physical damages. These are often referred to as “personal injuries” and include incidents such as…

It’s important for small-business owners to realize that these cases can be brought against you whether the alleged transgression was intentional or not. In the case of the British freelancer, the case could be made that she was simply airing her grievances via her right to free speech.

But unfortunately, even claims that never go to court still cost businesses money. Between the time that the freelancer’s client filed the lawsuit against her and the time it dropped the suit, she had to hire a lawyer and pay fees for that lawyer to respond to the charges and make preparations for trial. Lawyer’s bills aren’t cheap, but General Liability Insurance helps pay for legal counsel, as well as any settlements – even if you never go to court.

That’s good news – even if a case against you is dropped, it’s unlikely that your lawyer will dismiss your legal bills.

How Small Businesses Can Avoid Social Media Defamation Cases

Social media is undoubtedly an easy, cost-effective way for small businesses to reach out to the public and brand themselves. But as we’ve seen, it also opens the door for a variety of different legal exposures, including libel.

As it concerns social media, libel law is still a bit fuzzy. And while the U.S. Supreme Court has given social media the same kind of First Amendment protections as the mainstream media, there are limits to those protections. Sometimes the level of protection can vary depending on the forum in which the alleged defamation took place.

Even when a wayward comment doesn’t result in a lawsuit, your online followers may hold your business publicly accountable for your or your employee’s words, which can ultimately hurt business.

So how can you avoid accidentally committing online defamation? Adrianos Facchetti, an Internet defamation lawyer and author of the California Defamation Law Blog, offers a number of tips for avoiding Twitter lawsuits, which are summarized below:

For more pointers on avoiding social media lawsuits, check out our free eBook Tweet or Twibel: The Small-Business Owner's Guide to Advertising Injury.

Also remember that you may be held responsible for libelous posts your employees publish. Make sure that anyone and everyone involved with your business’s social media presence understands the threat and severity of libel lawsuits.


Risk Management | Small Business | Small Business Risk Management

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