If your online activities are not covered under your current insurance policies, a growing number of companies are offering media liability insurance. While these policies are expensive -- perhaps prohibitively so for a newly formed business -- they can also be quite comprehensive. They typically cover costs to defend against suits brought for:
- libel, slander, and defamation.
- invasion of privacy (a growing concern, as suits arising from newsgathering activities are not hampered by the First Amendment concerns that make libel and slander suits difficult to win).
- copyright infringement and other intellectual property-related suits.
- damages resulting from errors, omissions, misstatements or misleading statements made by you.
Media liability policies typically have a minimum coverage of $500,000 - $1 million and can run all the way up to $100 million for large publishers. The premiums may be as low as $500 a year, but typically begin at $2,500. Media liability insurance is a growing business with more companies underwriting policies every year, so it makes sense to shop around.
To help you determine what type of insurance may be right for you, we've created an interactive question tool for evaluating your insurance options.
There are two options for obtaining media libility insurance: (1) you can purchase insurance through a group or association (like the Media Bloggers Association or The Authors Guild), or (2) purchase your own policy.
Purchasing insurance through a group or association often has the benefit of offering lower premiums. There can be some downsides to group policies, however. The first issue to consider is whether the policy aggregates damages across the group. If so, one large claim against an individual group member would decrease the amount remaining on the policy limit for the other group members. The second issue to consider before obtaining a group insurance policy is that these policies typically give you less control over the handling and settlement of claims made against you, in many cases resting settlement authority with the insurance company.
If you decide to obtain your own media liability insurance, there are a number of carriers that provide policies in this area. Some of these carriers include: ThinkRisk, Chubb Group, AXIS PRO, First Media Specialists, ACE USA, InsureNewMedia, AIG, Darwin National Assurance Company, The Hartford and Hiscox USA. Keep in mind that you will likely have to go through a licensed agent or broker to secure coverage from these companies.
There are several things to consider when shopping for a media liability policy:
- International Coverage: Increasingly, traditional and non-traditional journalists are finding themselves sued abroad in jurisdictions more favorable to plaintiffs than the United States. If you are likely to touch on foreign issues or discuss foreign citizens in any way, you might want to ensure that your policy covers you for suits brought overseas.
- Settlement: Many insurance policies include "hammer" clauses, which specify that the insurer, rather than you, gets to decide whether to accept a settlement (at the penalty of losing or drastically reducing coverage if you don't acquiesce). Because insurers are worried about their economic bottom line rather than your reputation (or good journalism, for that matter), you and your insurance company may not agree on when is a good time to settle a lawsuit. Insurance companies sometimes include clauses giving them a say in whether or not you will print a retraction (something that can limit liability or damages in many states -- please see the Overview of Retractions section of this guide for more information).
- Punitive Damages: Some policies cover punitive damages and some do not. While actual awards of punitive damages against citizen journalists are likely to be relatively rare, this coverage may provide you with peace of mind and also enable you to fight rather than settle suits you believe are meritless.
- Coverage Period: Some policies cover you for any claim filed against you during the policy period; others, for any claim brought against you for an incident that occurred during the policy period. (To determine which your policy covers, look at the section describing the "triggering event."). The latter gives you more protection should you discontinue your site, terminate your policy, and subsequently find yourself embroiled in a lawsuit.
- Attorney's Fees and Policy Limits: Policy limits are generally in the neighborhood of $500,000 - $1 million, although individual policies can be higher or lower. All policies will pay attorney's fees, but some deduct defense costs from policy limits and some do not. Because such fees can be significant, this may make a large difference in the actual coverage of your policy.
- Retention Fee: In addition to your yearly premium, many policies also have a separate retention cost in the event of litigation. These fees typically run $5,000 - $10,000, and may or may not be recoverable.
- Counsel: Some policies allow you to select your own lawyer, while others do not.
- Financial Security: It is important to make sure your policy is underwritten by a company that is financially secure.
- Lawyer's Opinion: Some insurers require that you hire a lawyer to assess your chances of being sued and write an opinion letter to the insurer before it will underwrite a policy. The costs of this can be quite substantial.
The Application Process.
Depending on the company you choose, you may be able to apply for media liability insurance through a direct application process, or you may have to go through a broker, agent or underwriter. Generally, plans that go through an underwriting process are a bit more expensive, but have greater flexibility in tailoring the plan to your needs.
Before contacting the insurance company, you will want to gather the following information:
- Address of your website
- Subject area of your content - Financial, News, Adult-only Content, etc.
- The source of your content - yourself, employees, third parties, etc.
- Your consent and disclaimer policies
- Percentage of your revenue derived from different activities on the website (advertising, paid memberships, etc.)
- Any interactive features on your website (auctions, downloads, forums, comments)
- Contracts with any independent contractors or joint venturers
- Any record of consultations with a lawyer regarding the risk associated with your site (some insurance policies will require this)
- A list of the activities that are likely to create your greatest exposure to liability and what steps you have taken to minimize such exposure
- A list of techological protections you use for your website and associated data (firewall, encription for secure transfers, etc.)
- A list of the activities for which you would like insurance protection
- A listof any additional insureds or third party beneficiaries, such as employees or third parties that may be contributing content to your site