The Small-Business Owner's Guide to Advertising Injury

Chapter 6: The High Cost of Advertising Injury Lawsuits
Part 3: Dealing with Frivolous Advertising Injury Lawsuits

It's no secret that civil torts drain profits from small-business owners, drive up the cost of products and services, and burden the nation's judicial system. In 2010, tort costs soared to $264 billion — roughly $857 per person, according to the report "2011 Update on U.S. Tort Cost Trends" by risk management firm Towers Watson.

The bad news is that even a meritless lawsuit can hit your business in the pocketbook. For example, say a competitor sues your business for something you posted about it on Twitter. Even if the tweet doesn't amount to libel or false-light invasion of privacy, the tort can still rack up lawyers' fees and time away from your business.

In fact, the National Federation of Independent Business reports that U.S. small-business owners pay an estimated $35.6 billion just to settle civil suits — and 95 percent of small-business owners settle out of court when faced with a claim. (Read more in's article, "How to Handle Frivolous Claims.")

Given the rise in social media libel, copyright infringement, and invasion of privacy cases over the past few years, it's worth learning more about frivolous litigation so you know what to expect.

Next: Part 4: Social Media Defamation or Grasping at Straws: The Example of the $50k Tweet

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