General liability insurance covers the financial losses another person suffers as a result of your business's or employees' actions. In many situations, it can include claims of libel. As a business owner, it is essential to understand what libel (and slander) are and how to avoid such claims. When is your business responsible for libel claims?
What Is Libel and Slander
Often linked together, libel and slander are key concerns for many business owners. Here is a basic definition of each:
- Libel occurs when there is defamation in written form causing harm to the reputation or livelihood of another person.
- Slander occurs for the same reason but relates to spoken words.
Individuals and businesses can be both the victim and the cause of these types of claims. If you make a statement that implies inaccurate information about another party, you could face this type of claim. And, while your general liability insurance may help cover these losses, you need to understand what your responsibilities are in this situation.
When Is It Illegal?
In order for defamation to occur, it must meet the requirements under legal precedent. This can change from one area to the next. Generally, there are three requirements any claim must meet in order for it to be libel or slander.
- The statement has to be untrue. If the claim is true – no matter how bad it is – it is fact. It is not possible to suffer a claim for a true statement.
- You or your company representative must make the statement verbally or in writing to a third person. A statement made to another person directly without witnesses is not likely to move forward. Such actions involve a he-said, she-said claim.
- It has to cause some level of harm to a person or business. That person may have to provide proof of that.
What to Do If Someone Makes This Claim?
Your business insurance agent is there to help you. If anyone claims you or your company made a statement like this, do not take it lightly. Your agent will work with you to determine if they have a case. General liability insurance can help cover these losses in most cases. It covers only the business’s responsibility in such instances. If you made a claim like this on a personal level, it is unlikely to be able to help you. However, your agent will help you with the claim’s settlement, if necessary. It may also help with your legal defense.
Also Read: Protecting Injury Risks with General Liability Insurance