From the Spring 2009 issue of The News Media & The Law, page 21.
Media companies have relied on insurance policies for years to pay for legal defense fees in libel and invasion of privacy lawsuits. Now, as more bloggers are finding themselves slapped with such suits, they too are searching for insurance protection.
Lawsuits can cost hundreds of thousands of dollars. Most bloggers can’t afford to pay that out of pocket. And because they often aren’t trained as journalists, many might not understand the legal ramifications of their work. As Web reporting proliferates, bloggers could make easy targets for plaintiffs looking to sue.
Some bloggers can look to their homeowner’s and renter’s insurance policies to cover the costs of defending a lawsuit. But one organization is trying to provide an affordable, accessible insurance program for unaffiliated Web-based writers.
“Our concern is that bloggers were becoming easy targets for bullies who wanted to use courts as a club to suppress speech they don’t like,” said Robert Cox, president of the Media Bloggers Association. “I don’t care how bloggers get insurance, just that they do.”
Under the homeowner’s umbrella
Since before the days of blogs and Web sites, many homeowner’s and renter’s policies have included an option for coverage that would pay for the legal defense of personal injury lawsuits, including libel and slander claims, brought against the policy holder.
A baseline homeowner’s and renter’s insurance policy does not generally cover libel or slander lawsuits. But many policies allow the holder to purchase either an “endorsement” adding libel and slander coverage or an “umbrella policy” that would broaden and increase the policy’s coverage to include personal injury lawsuits, including libel, explained Jean Salvatore, senior vice president of public affairs for the Insurance Information Institute.
The difference between an endorsement and an umbrella policy is in the breadth of coverage. Dick Luedke, a spokesperson for State Farm Insurance, explained that an endorsement is an addition to a policy to cover a specific thing. State Farm policies don’t automatically include personal injury coverage. But an endorsement can be tacked on to a homeowner’s insurance policy to extend the policy’s coverage to include personal injury lawsuits such as libel and slander.
At State Farm, endorsements cost $10 a year for up to $100,000 in coverage and $24 a year for up to $1 million in coverage. Luedke said State Farm will look at a blogger’s level of risk for a lawsuit before it determines whether or not to extend the policy holder’s coverage.
By contrast, an umbrella policy supplements a person’s home and auto insurance and provides liability coverage beyond what the standard policy provides — both in amount and scope of coverage. Thus, an umbrella policy would not only provide broad personal injury coverage, including personal injury suits like libel and slander, it would also increase the amount of coverage in the individual’s policy across the board.
Umbrella policies generally cost between $200 and $300 a year, Salvatore said. In order to buy an umbrella policy in addition to a standard homeowner’s or renter’s insurance policy, Salvatore said most companies also require a policy that provides at least $300,000 in liability coverage.
At Allstate, for example, people who want insurance coverage for libel and slander can purchase umbrella policies to supplement their home and auto insurance, spokesman Raleigh Floyd said. Umbrella policies provide extended coverage in the amount of $1 million to $5 million, he said, and the cost can vary state to state.
Both umbrella policies and endorsements have limitations, however. Salvatore said they only cover lawsuits brought against bloggers who receive no income from their blog. Once a blogger starts making money from a blog, it turns into a business. Businesses are not protected by homeowner’s policies.
Both State Farm and Allstate provide business insurance policies with options to include libel suit protection, their representatives said.
Cameron Stracher, a media lawyer and professor at New York Law School, explained that whether or not a blog is a “business” is often a tricky question. If the blog has just one advertisement or accepts donations it might be considered a business, he said: “There is a blurry line, especially when it comes to blogging, between what someone is doing as a business interest and somebody who might be keeping a diary.”
Insurance for all bloggers
That’s why Media Bloggers Association decided to step in. Cox said he teamed up with Media Professional Insurance, a Kansas City-based company that provides libel insurance to news organizations of all sizes, to start providing insurance targeted directly at bloggers.
“The perception among potential plaintiffs is that bloggers will cave in,” Cox said. “The reality is, they do. I can’t tell you how many times I’ve been on the phone with bloggers telling me they got a threat and they already took down the blog post or shut down their blog.”
Cox was concerned about these suits chilling the speech of bloggers and forming bad legal precedent. So he sought to create a program that would educate bloggers about their legal rights as writers and provide an insurance policy that would protect them in the case of a lawsuit.
The first BlogInsure policy was sold in January, he said, and since then, about six more have been sold each month. No policy holders have yet been sued or otherwise had to make a claim, he added.
“We want bloggers to be in the most defensible legal posture,” Cox said. “Most bloggers perceive themselves as not having risks. But now you have a situation where not just newspapers are getting sued for defamation.”
For example, blogger Donald Wizeman, of Myrtle Beach, S.C., was slapped with a $1.8 million judgment earlier this year after he lost a defamation lawsuit. A local advertising executive had sued Wizeman, who runs the Web site Myrtle Beach Insider, for defamation, alleging that Wizeman called him a “failed lawyer.” Wizeman has appealed the lawsuit.
In another recent lawsuit, a mortgage company sued a Web site called the Mortgage Lender Implode-O-Meter for posting a confidential loan chart online that the mortgage company alleged was defamatory. The Superior Court in New Hampshire granted an injunction prohibiting the Web site from republishing the loan chart and any comments from online users about the chart. The court also ordered the Web site to identify who had provided the loan chart. That case is also on appeal.
The basic insurance policy costs at least $540 a year, Baldwin said. But certain factors — such as whether a blogger has incurred litigation before, how many bloggers write for a Web site, how much income the blog generates and the amount of investigative reporting a blogger does — can raise the price.
The insurance policy is similar to policies held by many large media companies and generally will cover the costs of legal defense and damages, minus any deductible, in lawsuits brought against the blogger for defamation, invasion of privacy or copyright infringement, Baldwin said. It would not cover the cost of bringing a lawsuit. Nor would it cover a fight to quash a subpoena, which is a legal battle many anonymous bloggers have been waging lately.
For now, Cox said, the insurance only covers bloggers based in the United States, but it will cover them wherever they get sued — either in the U.S. or abroad.
In order to secure a rate that most bloggers could afford, Cox said his organization purchased a large policy through Media Professional and is providing it to bloggers at a lower rate. To obtain the insurance, a blogger must first join the Media Bloggers Association, which costs $25 a year. The blogger must also show that he or she has some knowledge of media law, Cox said, by passing the online quiz the Media Bloggers Association put together with the help of the Poynter Institute. The multiple-choice quiz takes about an hour and tests the blogger on topics of defamation and copyright law.
Cox said it’s meant to serve as a tool to educate bloggers about the law so they will know the risks involved with publishing a blog and understand their legal liabilities.
“This whole thing is brand new,” he said, and the program is a work in progress: “We are still going to tweak it.”