Does Homeowners & Renters Insurance Cover Defamation Lawsuits?

Homeowners' and renters' insurance plans are frequently ignored as potential sources of coverage. In fact, many homeowners' and renters' insurance plans cover damages and legal fees associated with claims filed against an insured person for "bodily injury" and/or "personal injury."

"Bodily injury" is generally defined or understood to include coverage for injuries resulting from defamation or invasion of privacy. Consider some of the most prevalent repercussions of online defamation or slander:

Mental suffering, Anxiety, Depression, and Additional physical ailments.

A liability umbrella added to a homeowners policy may also give further financial protection. However, this obviously only applies if the insurance contract specifies that coverage for these types of claims already exists.

Defamation claims can also be covered by "excess liability" coverage - a policy that extends beyond the typical limitations of a primary liability insurance policy – in addition to homeowners and renters insurance.

Consider extra liability coverage to be a safety net for your insurance, catching anything that your regular policy does not cover.

Insurance Coverage Restrictions and Exclusions for Defamation Actions

Even if defamation coverage is discovered in a policy, there are a number of usual exceptions and restrictions.

For instance:

Most insurance policies do not provide coverage for copyright or intellectual property disputes or lawsuits.

Business pursuits: Homeowners and renters policies frequently contain exclusions that deny coverage for claims arising from "business pursuits" – a term whose definition varies widely from state to state (for instance, blogs that earn even nominal advertising revenue can be considered a business pursuit);

Malice: Claims may be dismissed if a statement or publication is made purposely with true malice and with the speaker's awareness that it is incorrect. It does, however, typically cover negligence unless gross or wanton.

In addition, punitive damages are normally not covered by homeowner's or renter's insurance plans.

Considerations When Buying Specialized Defamation Insurance

If you decide to get specialized defamation insurance, there are a number of coverage areas you should seek:

Parties acquiring defamation insurance should ensure that the policy includes claims linked to publication and newsgathering. In addition to libel and defamation, these plans should also contain coverage for invasion of privacy and mistakes and omissions. Moreover, this policy should endeavor to incorporate intellectual property infringement concerns.

Defamation lawsuits can be rather expensive, so be careful to include litigation and defense expenses. There is no point in going bankrupt and spending significant quantities of money to defend yourself, especially if the action is without merit.

Occurrence policies: Occurrence policy coverage protects parties from actions or events covered during the specified policy period, which is crucial if you face a defamation lawsuit several years after the incident occurred.

Global coverage: If you engage with a largely foreign audience, you should consider global coverage to protect you from lawsuits filed outside the U.S.

And, if you're wondering where the money you pay for defamation insurance goes, it goes into your attorney's evidence collecting and preparation to strengthen your potential defenses.