Although blogs are springing up in businesses everywhere, insurance buyers and some brokers may not be aware of the nuances of potential liability–or that they might not be covered by their standard general liability policies, industry experts warn. While such exposures might appear to be second-nature for media entities expanding their Web presence, non-journalistic firms using blogs as marketing tools may not be so savvy about the risks involved.

“This is a wide open area,” said Ken Goldstein, worldwide media liability manager for The Chubb Group of Insurance Companies in Simsbury, Conn. “The courts are looking at it on a case-by-case perspective.”

Chad Milton, national practice leader for media liability and intellectual property, with Marsh in Kansas City, Mo., said most of his clients–publishers and broadcasters–are “armpit-deep in blogs.” For them, he said, a blog is a natural extension of what they already do. “In fact, in a lot of ways, a blog isn't any different from what they've done before.”

For nonmedia companies, he said, “I get involved when they have media liability issues.” One thing that's come up more and more with nonmedia companies, he explained, is that they have discovered blogs as a marketing tool “and are starting to realize they are taking on the liability of the publisher clients.”

He said that “by the time they get to me, they have figured out they have these exposures, although they may not know specific questions to ask, or the rules of defamation online.”

In some ways, the laws of libel have changed with online distribution, “and in other ways they haven't,” he said, citing issues about who is liable for blogs and whether corporate liability exists for an employee's personal blog. “I tell them there might be liability for an employee's private blogging. It's really going to depend on whether people will understand that the employee is acting outside the scope of his or her employment.”

Mr. Milton said this question becomes trickier for the employee of a media company. When writing, a well-known reporter or editor “is in a sense always representing the employer,” he said. “That's how the employee is seen, which isn't the case for somebody who works for a shoe company and publishes something, because there's not a natural connection.”

But while employers need to protect themselves with regulations, at the same time, “there are first amendment issues about how to restrict the free speech of employees. So it's a fairly delicate balance.”

Mr. Milton said there is no such thing as a blog liability policy.

A publisher would have a media liability policy, “and there won't be any issue about blogs being covered under that policy,” because a publisher's liability policy covers dissemination of any media.

But for a nonmedia company relying on a general liability policy, this could be an issue. Some newer versions of CGL policies limit coverage of Web sites to the content of the site that is advertising, he said.

This is defined as notices to the public designed to encourage sales of products. “That's something every nonmedia company should look at,” he cautioned.

He said that while there is no specific blog policy, an individual with a blog could get a media liability policy. “Someone like Matt Drudge would be like a small publisher, and there is a market for that,” he said.

Leib Dodell, president and chief executive officer of Media/Professional Insurance, a managing general underwriter in Kansas City, Mo., defined a blog as “really just an online, interactive magazine–a way for companies or individuals to reach out to a broad audience very easily.”

What's happening, he said, is that many exposures previously limited to traditional publishers “now affect everybody because it's so easy to put up a blog.”

A big challenge, he said, is that while an organization can control what it posts, “you can't control what other people post,” which is “the whole idea of the blog.”

He added that this situation has created many privacy, libel and slander, and copyright and trademark issues. These issues now affect a much larger number of people, including private individuals, consumer companies, entertainment companies and TV shows, many of which have blogs.

The professional liability insurance community “recognizes that this is to some extent changing the landscape of E&O [errors and omissions] coverage, as more and more people and organizations face these types of exposures,” he said.

He cautioned that brokers need to be aware of what their clients are doing in this area and make sure they're covered.

“The GL policy is not a great vehicle to address this exposure, in my opinion,” he said. “It was not created with this type of underwriting in mind.”

He added that there has been a “dramatic interest” in this area. “In fact, our submissions are up 44 percent in 2006 for that coverage,” he said, adding that the number of blogs appears to be doubling every few months. Interest is driven by the issue of privacy, blogs and related technologies.

Mr. Dodell said that although legal issues for blogs “aren't terribly novel in most cases,” people are often caught off guard “because they wouldn't necessarily have thought of themselves as publishers, and now they're facing a defamation lawsuit or a copyright infringement lawsuit.”

Publishers and broadcasters generally are familiar with these issues and prepared with resources and risk management. “But if you're a commercial enterprise that doesn't think of itself as a publisher, you probably don't have the right practices in place to make sure that content is being policed.”

He noted that such a company may not know where to turn if it is slapped with a lawsuit, because “it may not have a relationship with a technology or intellectual property law firm. I think that's where specific E&O insurance can be very helpful.”

Mr. Dodell highlighted two statutes relevant to the issue. One is the Communications Decency Act, also known as Safe Harbor. This states that the host of an interactive computer network is not liable for defamation for third-party postings.

While a company operating a blog where comments can be posted shouldn't have liability for the content of those postings, “you still have liability for your own postings, and that's the thing that people miss,” he said. “Often these blogs are being operated quickly by business people, or people who don't understand the rules of libel and slander, so you have to be careful what your own people are saying.”

The second act, the Digital Millennium Copyright Act, tries to do something similar for copyright infringement claims arising from third-party material, he said.

“If someone posts content and someone else says it infringes with their copyright, under that statute, as long as you have take-down procedures in place, or a process by which once you're notified you can get the content off the site, you're protected against liabilities.”

Mr. Dodell said that anyone with a blog needs to be aware of these acts because they are helpful to the defendant. He added that “it's important that the lawyers representing these organizations are familiar with the legislation” as well.

Mr. Goldstein said that insureds and brokers should make sure the insuring agreement and definition of media activities, or covered media, is broad enough to pick up the appropriate type of Internet activity coverage for the blog they have. Most important, he said, there should be no specific exclusion carving out blogs.

From an underwriting perspective, “we look at a variety of things,” he said, including the blog's content, topics discussed in connection with the blog and the level of controversy. “That's important, because more controversial content could result in claims more so than less controversial,” he said.

“What's also important is whether the blog is a person outlining their thoughts in connection with a specific topic or whether it has interactive comments built in.” This is key, he said, because “if there is a comments feature, I'd want to know if the insured is actually filtering the comments.”

The question here, he noted, is whether any editing done could contribute to a claim. An example, he said, would be someone in the course of a blog discussion who names someone who allegedly has committed a criminal act. “Say there is a filter in place by the insured and for some reason they filter out the 'allegedly,'” he said. “Here you have filtered the content in a way that can open the insured to liability.”

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