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Defamation insurance

Libel, slander, and other defamation lawsuits can cost your small business time and money. General liability insurance typically includes coverage for defamation claims, and can help pay for your legal expenses.

What is 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:

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

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What are some examples of defamation claims?

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

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

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.

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How does business insurance cover defamation lawsuits?

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

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:

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:

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.

Is defamation covered by homeowners insurance?

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.

Who needs defamation insurance coverage?

Any small business can benefit from defamation insurance, but there are some companies and industries that face a higher risk of getting sued for defamation. These include:

  • Retail stores: The regular interaction between employees and customers in retail stores provides more opportunities for a defamatory statement to be made.
  • E-commerce businesses: Online retailers are vulnerable to defamation claims around product quality and customer reviews.
  • Media and advertising agencies: PR firms and marketing agencies creating promotional content for social media are more susceptible to libel and slander claims.
  • Online content creators: Influencers, bloggers, and YouTubers can have wide audiences and should be wary of the content they publish and who is consuming it.
  • Sales representatives: If a sales rep makes inaccurate or damaging comments about a competitor on cold calls, they could face a slander lawsuit.

How can I protect my business from defamation claims?

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:

Talk to your team

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.

Track your brand online

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.

Create communication guidelines

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.

Build trust with your customers

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.

How to get defamation insurance

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.

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Updated: June 20, 2025

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