Defamation insurance: can your business insure against a defamation claim?

What is defamation insurance?

It is cover for the claim that something your business published damaged someone's reputation. It pays your defence, and what you become legally liable to pay, including the other side's costs. In the policies we place, it is not sold on its own. It comes as a section of a wider policy, and for what a business publishes, these are the four places it usually sits:

• A media liability policy, as primary cover. This is the one built for businesses whose product is content.
• A professional indemnity policy, usually narrowly, for defamation arising from your professional work.
• A public liability policy, on many wordings, for defamation in your own advertising.
• A cyber policy, where a section for website and social media content is included.

Which one answers depends on what you publish and why you publish it. Getting that match right before anything goes out is most of the job.

This is general information about how these policies are written, not legal advice about a particular statement.

Does professional indemnity insurance cover defamation?

Usually, but narrowly. Most professional indemnity policies reach defamation arising from your work, and commonly only where you did not intend to defame. Some wordings write it as an extension with that proviso. Others name defamation in the main cover and then exclude a statement you knew, or should have known, was defamatory.

The second catch is timing. On many professional indemnity insurance wordings, a claim means a proceeding or a demand for money, so a letter asking you to take something down is not yet a claim. Your business funds that first stage itself, and it is usually the least expensive stage to end.

If content is not your product, that narrow cover may be all the defamation cover you need. If content is your product, an extension written for the occasional slip is not built for you.

How does media liability insurance cover defamation?

As primary cover. On the media wordings we place, defamation has its own insuring clause, the part of a policy that says "we will pay for this". It reaches libel, slander, product disparagement and injurious falsehood (a claim that you damaged another business by publishing something false about it). Invasion of privacy sits beside it, and so do copyright and trade mark claims.

It follows the content you create or share, or someone creates or shares for you, in the course of the business activities on your schedule. A post, a newsletter or a client's campaign is in scope when that work is on your schedule.

The section has to be bought, and the schedule shows whether it was. The name on the front of the policy proves nothing. Media liability insurance is built for production and filming companies, event producers, publishers, advertising and digital agencies, creators and influencers, and businesses that license their name, format or work.

Is a letter demanding a retraction already a claim?

On a media policy, yes. On the media wordings we place, a written request for a retraction or a correction is a claim in its own right, so the policy can be notified and can engage from the day that letter lands. The comparison runs both ways: many professional indemnity definitions catch a demand made verbally, which the media definition does not.

Ring your broker the day the letter arrives, before you reply to it. The media wordings we place ask you to notify as soon as is reasonably practicable, and not to admit liability, settle, or promise any payment without the insurer's written agreement.

Can I buy defamation cover after a complaint arrives?

Not for that complaint. On the media wordings we place, a claim or circumstance that a director or senior executive knew about, or ought reasonably to have known about, before the cover first started is excluded. A claim arising from something done before the retroactive date on your schedule is excluded too.

So the cover has to be bought before the complaint, not because of it.

Does public liability or cyber insurance cover defamation?

Sometimes, within limits. Many public liability policies include defamation, either as "advertising injury" in your own advertising or inside their definition of personal injury. Some include none at all. On most of the public liability wordings we have read, that cover is excluded for a business whose principal work is advertising, broadcasting, publishing or telecasting, and for a statement you knew was false.

So public liability insurance can answer for a business's own advertising. It is not built for a business whose trade is publishing.

Some cyber insurance policies can also pay when content on your website or social media is alleged to defame someone, where that section is included. Check the schedule for it rather than assuming it is there.

What does a media policy leave out?

Four things to read before you rely on it.

• A deliberate attack. A wilful, malicious or dishonest act by a director or senior executive is excluded once a court finds it or it is admitted in writing.
• Misleading advertising. Some media wordings exclude civil liability for misleading or deceptive advertising, which is exactly the claim an agency's own work can generate.
• Secret recording. Unlawful surveillance is excluded: eavesdropping, wiretapping, and unauthorised audio or video recording, by you or for you.
• Where you can be sued. An action brought outside the territories on your schedule is excluded, and for a claim made in the United States the limit becomes one total for the year, including defence costs. Content online can be read anywhere, so check the territories against where your audience is.

When should we talk to a broker about defamation cover?

Before you publish, not after the letter. If your business writes, films, posts or publishes, for itself or for clients, bring us the contracts you sign and a list of what you put out. We will read the wording against that work and tell you which policy should hold the cover. If the professional indemnity extension is all you need, we will tell you that instead.

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