I get many phone calls from people and companies looking for general liability coverage as an insurance broker. These organizations can be anything from a basic contractor to a full-service daycare. It is not the gamut of these organizations that I am concerned with, at least for this article. Instead, I am concerned about the individuals and/or organisations that call seeking general liability insurance for media-related companies and are unaware they require a more specific coverage called media liability insurance (or communication liability insurance).
These individuals and companies include bloggers, web developers and radio show hosts, authors, producers companies, broadcasters of instructional material and television and radio stations, motion pictures companies, cable and satellite broadcasters, as well as other entities involved in the preparation of materials for publication, republication and electronic publishing.
Many of these people and organizations don’t realize they need media coverage. Worse, many insurance professionals don’t know media liability coverage or that it is excluded from their general coverage. Personal and advertising injuries include liable, slander or defamation, copyright infringement, patent infringement, and patent & trademark infringement. More often than not, it is only when there is a claim, and too late that the individual/organizations learn that the most important coverage for their operation, is excluded from their policy, Media Liability. Most people begin their search after being told by a contractor or vendor to get liability insurance. However, some professionals in the industry know they need it but struggle to find a professional who can help them.
In any case, the majority of these people or organizations are in dire straits by the time we reach them. Many of them have been told by brokers and agents that the insurance they need doesn’t exist, or is not available. This frustration is understandable, as well as the many dead ends that lead them to media liability insurance.
Most people associate insurance companies with advertisements. These ads include those for AllState and Nationwide, Liberty Mutual, and Geico. None of these insurance companies offer any type of media liability insurance. Most people are frustrated and disillusioned as a result. Although media liability insurance coverage can be very easy to understand, many captive agents don’t offer it. Agents and brokers who deal primarily in home and auto insurance are not qualified to offer this product.
You are probably asking yourself “What is media coverage?” Media Liability Insurance covers you against any claims that arise from the display, communication or transmission of information in a way that might violate the rights. Third party coverage is very important for Media Liability Insurance. It covers you against personal injury liability, financial consequences, and unfair competition claims. Printing a negative statement about someone or making slanderous remarks regarding a company or individual’s products, using someone’s logo in an advertisement or publication, or making unlicensed cartoon characters, as well as marketing your product with damaging false claims about other competitors’ products.
Citizen Media Project, an affiliate of Harvard Law School’s Berkman Center for Internet & Society, reports that US-based lawsuits rose 70% between 2006 and 2008. In the event of a case going to trial, the cost to hire an attorney to defend these claims can be anywhere from $5,000 to $100,000. Ron Coleman, a trademark attorney at Goetz Fitzpatrick, New York, stated that damages were awarded in 17 of the 256 lawsuits from 1994 to April. These cases totaled $43.9 million. (1)
This is an average of nearly $2.6M per judgement, including legal costs. According to various internet publications, half of all adults use social networking sites such as Facebook, MySpace, and Twitter. These sites often allow users to post quickly and impromptu. Posts can also be taken out-of-context and stored indefinitely could make it vulnerable to future claims. Another point is that adults should ensure they have personal injury coverage on the homeowner’s policy. This coverage does not need to be added, and it is essential if you are obtaining or planning on purchasing a personal umbrella policy. This coverage offers similar protection for individuals working in non-media industries, but at a personal level. A recent case involved an internet-blogging youth. Her daughter was a terrible math teacher and hated math class. Online, the daughter made many “disapointing” comments about her teacher. The teacher sued the parents and won $750,000.
Our litigious society has the problem that a lawsuit or claim may not necessarily involve an error or omission. A client might not be satisfied with service, or they don’t want to pay the bill. They can file a claim or lawsuit alleging an error, but ultimately, their goal is to avoid having to pay for the services rendered. The defendant must still hire counsel to respond to the claim. This is true in all cases where a lawsuit or claim has been filed. Media Liability Insurance usually covers the costs of defending such a claim. This can often be the largest expense in a suit.
A large number of insurance companies carefully underwrite today’s media liability policies. They are designed to meet the needs of increasing numbers of companies with communication exposures.
