Words on the web: Umbrella coverage helps protect your opinions

Rita Colorito

These days, it's easy for consumers to give their opinion on everything under the sun. Online websites automatically ask for reviews after a purchase, and websites such as Yelp, Angie's List and TripAdvisor provide and solicit opinions on various businesses and services, such as restaurants, contractors and hotels.

The right to state your opinion is protected under the First Amendment of the U.S. Constitution, but your honesty still could burn you financially. In several recent cases, defamation lawsuits have been filed against consumers for reviews they posted online. One ongoing case involves a $750,000 defamation lawsuit brought against a Virginia woman for her negative Yelp review of a home contractor.

Internet defamation lawsuits constitute just a small portion of all lawsuits, but experts say they're seeing an increase in these cases and expect them to become more common in the future. Here's some advice to keep in mind, and the insurance coverage you should have, before you hit "post."

Defamation defined: What not to post

For a statement to be considered defamatory, it needs to be false and it needs to be a statement of fact rather than opinion, says Jeffrey Hermes, director of the Digital Media Law Project at Harvard University.

"You need to be careful when you state your opinion that you don't inadvertently imply facts that aren't true," Hermes says. "You could be held responsible for the false statements you imply."

Hermes says a good example is posting that someone, such as a doctor, is an alcoholic without providing the reasons you think that's true. "People who read that comment are going to be drawing inferences that later might not be true," Hermes says.

Before posting a negative review online, keep any related evidence. For example, if you're complaining about a doctor's billing practices, be sure to hang onto your medical bills.

"If you have a real complaint, just make sure you have the back up to support it," says Dominique Shelton, a partner at law firm Edwards Wildman Palmer LLP in Los Angeles.

So how can you get your complaint right?

State the facts behind your opinion, Hermes says, and have someone else read what you've written - before you post it - to catch unintended implications.

And if a business decides to sue you, the website where you wrote the offending post won't be there to help you. In their posting guidelines, many rating sites like Yelp clearly state that they aren't responsible for what you post - a stance that's also protected by law. The federal Communications Decency Act of 1996 protects operators of "interactive computer services," including websites, from being held liable for anything their users post.

Even if you post anonymously, your identity won't necessarily remain hidden. Depending on a website's privacy disclosures or terms of service, it might reveal your identity if faced with a court order, Shelton says.

Parents also should be aware of reviews their children post online. "A parent could potentially be sued for the actions of their child," says Howard Mills, director and chief adviser of Deloitte LLP's insurance industry group.

When can your opinion land you in trouble the most? Hermes says the majority of online review defamation cases arise from disputes between:

  • Physicians and patients.
  • Contractors and homeowners.
  • Landlords and tenants.
  • Hotels and guests.

Coverage before criticism

"Insurance coverage can help you hire an attorney who can defend against these claims," Hermes says.

But the right kind of insurance matters. Homeowner's policies usually cap liability coverage at $500,000, and often exclude punitive damages. Most defamation lawsuits seek punitive damages and fall outside the scope of liability coverage provided under a typical homeowner's insurance policy.

Umbrella policies provide consumers with broader liability coverage, and cover defamation and libel. Mills, a former insurance superintendent for New York state, suggests an umbrella policy should be at least equal to your total net worth this is the value of your assets, including cash, minus all that you owe). "It's the difference between complete protection and utter financial ruin," he says.

Some umbrella policies also provide coverage for PR representation, to fix the damage to your own reputation from a libel suit.

An umbrella policy can be added onto either a homeowner's insurance policy or auto insurance policy. What most people fail to realize, says Mills, is that umbrella policies are surprisingly affordable. The premiums decrease for each additional $1 million in umbrella coverage purchased.

If you already have an umbrella policy, make sure it's up to date. For example, if you bought your umbrella policy 10 years ago, your net worth most likely has gone up.

"If you never revisit your umbrella policy, you can be dramatically underinsured and not even know it," Mills says.

If you get sued

Many libel cases can easily be dismissed invoking what are known as anti-SLAPP laws, Hermes says. SLAPP stands for "strategic lawsuits against public participation." Typical claims in a SLAPP suit are libel, slander or restraint of business, according to Cornell University's Legal Information Institute.

"The idea of SLAPP suits are that it's difficult for people to afford to defend against the lawsuit, so some people give up even if they might win in the long run," Hermes says. However, if you do decide to take this route, you'll still need a lawyer to get your case dismissed.

If you can't afford a lawyer, a legal group like Public Citizen might take on your case at no or little cost to you. "Some lawyers are willing to take these cases on a pro bono basis because a failure to defend these cases can wind up in a loss of First Amendment rights for everybody," Hermes says.

If you are sued for an online review, contact your insurer first. The terms of the umbrella policy will determine whether you can use your own attorney or must choose one provided by the insurance company that issued your umbrella policy. If picking your own attorney matters to you, then ask about that when you're shopping for coverage, Mills says.

Keep in mind that having an umbrella policy doesn't give you the freedom to make verbal attacks. Some insurers might refuse coverage if you knowingly made defamatory comments or if you were attempting to smear a business' reputation, Shelton says.

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