Commercial General Liability Coverage for Defamation:


While the momentous events of the 2011 show that social media has the capacity to affect great political and social change, the very penetration of such media into the day to day lives of the population also carries with it unanswered questions in the areas of defamation and related torts.  The same social media platforms – Facebook, Twitter, YouTube, and the like – that aided in toppling governments throughout the Middle East and allowed Western audiences an unprecedented and unfiltered glimpse into the events reshaping a region[1] can, unfortunately, also just as easily be the vehicle for the type of speech and disclosure that can give rise to civil liability and may trigger insurer duties to defend and indemnity.[2]

            This article will examine the initial coverage questions and determinations that must be made when defamation – and specifically defamation involving social media – is tendered for defense and indemnity coverage under a commercial general liability (CGL) policy.   As defamation causes of action are nearly always defined solely by state law,[3] it is important to note that many coverage decisions in this area should pay careful consideration to the specific state’s pleading and evidentiary requirements for a given defamation action.  As will be discussed in greater detail below, the pleading requirements of a given state’s defamation jurisprudence may make any CGL coverage determination for defamation claims within that state a straightforward matter but, more likely, a case-by-case and fact-by-fact analysis would appear to be the more prudent course.

            As an initial consideration, it should be determined whether the alleged “defamatory communication” occurred while the employee was acting “within the course and scope” of their employment.[4]  While this would appear to be a relatively straightforward question, the recent trend towards remote work – especially for a more information-based work force – may blur this otherwise clear distinction.  Suffice to say, consideration of not only where and when the allegedly defamatory communication was made, but also what other activities in which the insured was engaged, will likely be necessary.

            Second, it is critical to consider whether the injuries or damages claimed in any defamation suit could be considered an “occurrence” under either Coverage A or Coverage B of a given CGL policy.  With regard to Coverage A[5] for “Bodily Injury,” the determination will likely require an analysis of the state-specific jurisprudence, and the specific allegations of the defamation complaint.  Initially, it should be noted that some states do not consider the posting of a defamatory statement on the internet to be an “occurrence,” as that term is generally defined for Coverage A purposes, as the act of posting such a statement on the internet is intentional, and accordingly, not an “accident” as required for coverage.[6]  This interpretation, however, is far from universal.  Other jurisdictions have held that, while the actual statement or communication may be a volitional act, that defamation itself is a tort that does not require “intent” – put another way, these jurisdictions have held that it is possible to negligently or recklessly defame a person or entity.[7]  The question of whether defense or indemnity under Coverage A will also require the claims professional to examine whether the particular defamation claimant has alleged “bodily injury.” Many jurisdictions have held that simple reputational harm or “emotional distress,” without some physical manifestation, is generally not enough to constitute a “bodily injury” under Coverage A and, accordingly, the specific symptomatology alleged by the claimant – if any – should be carefully examined and the specific law of that jurisdiction considered.[8]

            Consideration of whether a particular defamation injury or harm is covered is somewhat more straightforward under Coverage B for “Personal or Advertizing Injury.”  Gone is the requirement of a “bodily injury,” and further, the general definition of a “Personal or Advertizing Injury” expressly includes defamation in the form of libel and slander.[9]  Accordingly, if an injury does not trigger coverage under Coverage A, it will likely still trigger Coverage B.  Nevertheless, certain standard exclusions may nevertheless apply.

            First, it should be noted that the standard “co-employee exclusion” will generally work to exclude coverage when one employee defames another employee.  This exclusion is generally available not only when the defamatory statement occurred at the place of work, but also when the communications giving rise to the claim “arose from” the employment of the parties.[10]  Next, the claims professional should consider the “expected and intended acts” exclusion, which excludes from coverage any harm or injury which was intentionally inflicted, or was of the “same general type” of an intended harm or injury.[11]  However, with specific regard to defamation, several courts have held that the harm or injury that results from a libelous or slanderous statement is often an unintended consequence and, accordingly, the allegations of the particular complaint – as well as the individual state requirements for defamation discussed above – should be carefully examined before availing oneself of this exclusion to avoid coverage.[12]

            The next two exclusions to carefully consider both depend on the knowledge and intent of the defaming speaker or publisher: the “knowing violation of rights of another” exclusion and the “material published with knowledge of falsity” exclusion.[13]  In both of these cases, the claims professional must look closely at the allegations of the complaint or claim itself, as an allegation of intentional conduct alone may serve to avoid coverage,[14] but a claim that states the defaming publisher or speaker “knowingly, recklessly, or negligently” defamed another would likely trigger coverage, regardless of the above-discussed exclusions.[15]  Accordingly, application of these two exclusions again requires an examination of the applicable state laws of defamation, in order to determine whether “intent” is an essential and required element of proof.

            Finally, Coverage B contains a relatively new and untested exclusion, that may have great relevance to defamation claims in the social media context.  Specifically, the “electronic chatroom or bulletin board” exclusion avoids coverage for personal or advertizing injury arising from a web-based publication that “the insured hosts, owns, or over which the insured exercises control.”[16]  While it does not appear that this particular exclusion has been challenged in the courts as of the date of this article, it would nevertheless appear that a compelling argument could be made that an “insured’s” postings within the social media sphere would not give rise to a covered loss, as these types of “electronic chatrooms or bulletin boards” are presumptively within the control of the person who “owns” to them.  While the “electronic chatroom and bulletin board” nomenclature is somewhat antiquated, it would nevertheless appear to contemplate and allow a denial of coverage for defamation for an insured’s posts on their own personal site, but potentially not for posts or “comments” left on another’s personal site.

            In the ever-shifting and evolving environment of social media, it can be challenging to understand the implications and possible coverage scenarios that can emerge from online activity and commentary.   The rapid and pervasive expansion of social media into the day-to-day lives of the populations domestically and abroad appears to be merely the beginning of an overall trend of interconnectivity, which could lead to a higher level of discourse, but which could just as easily lead to a proliferation of defamation and privacy claims.  Further, the defamation jurisprudence generally differs between jurisdictions and, accordingly, must be considered on a state-by-state basis.  Therefore, it remains of critical importance for the claims professional to fully familiarize themselves with the local authority when determining coverage questions for defamation causes of action under CGL policies.

[1] See e.g. Peter Apps, Insight: Social Media – A Political Tool for Good or Evil?, Reuters;

[2] See Latisha D. Rhodes, Esq., Insurance Implications of Social Media – Does Coverage Exist in Homeowners and CGL Policy Forms?, For the Defense, May 2011, pp. 26-33.

[3] See e.g. The Media Law Resource Center, (“Under the American federal law system, defamation claims are largely governed by state law, subject to the limitations imposed by the free speech and press provisions of the First Amendment to the U.S. Constitution as interpreted and applied by the Supreme Court and other courts.”)

[4]  Please see Standard CGL Policy CG 00 01 10 01, Section II(2)(a)(“  Each of the following is also an insured: a. Your "volunteer workers" only while performing duties related to the conduct of your business, or your "employees", other than either your "executive officers" (if you are an organization other than a partnership, joint venture or limited liability company) or your managers (if you are a limited liability company), but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business.”)

[5] It should be carefully noted that many, if not most, claims for defamation will fall outside of Coverage A, by operation of the “personal and advertizing injury” exclusion.  Standard CGL Policy CG 00 01 10 01, Section I, Coverage A(o).  Other coverage concerns are discussed above, however, as many have dual applicability in both Coverage A and Coverage B scenarios.

[6] See e.g. Mountain States Mut. Cas. Co. v. Hauser, 221 P.3d 56, 60 (Colo. Ct. App. 2009); Stellar v. State Farm General Ins. Co., 69 Cal. Rptr. 3d 350 (Cal. Ct. App. 2007).

[7]  See e.g. Maine State Acad. Of Hair Design, Inc. v. Commercial Union Ins. Co., 699 A.2d 1153, 1157 (Me. 1997); Wagner, Nugent, Johnson, Roth, Romano, Erikson & Kupfer, P.A. v. Flanagan, 629 So. 2d 113, 115 (Fla. 1993); see also Restatement (Second) of Torts §558 (1977).

[8] See e.g. Allstate Inc. Co. v. Diamant, 518 N.E. 2d 1154 (Mass. 1998); Voorhees v. Preferred Mut. Ins. Co., 607 A.2d 1255 (N.J. 1992)(holding that a “physical manifestation” is required to trigger coverage for “bodily injury”); however, see also Lavanant v. Gen. Accident Ins. Co. of Am., 595 N.E. 2d 819 (N.Y. 1992)(holding that allegations of “mental anguish” may be construed to be a “sickness or disease,” and thereby satisfy the requirements for “bodily injury” under Coverage A.)

[9] “Personal or Advertizing Injury” is generally defined as follows: “oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services.”  Standard CGL Policy CG 00 01 10 01, Section V(14)(d).

[10]  See Standard CGL Policy CG 00 01 10 01, Section I, Coverage A(2)(e); Mactown, Inc. v. Continental Ins. Co., 716 So.2d 289, 293 (Fla. DCA 1998); State National Inc. Co. v. Affordable Homes of Troy, LLC, 386 F. Supp. 2d 1281 (M.D. Ala. 2005).

[11] See Standard CGL Policy CG 00 01 10 01, Section I(2)(a); Lincoln Logan Mut. Ins. Co. v. Fornshell, 722 N.E. 2d 239 (Ill. App. Ct. 1999); United Services Automobile Association v, Selz, 637 So.2d 320 (Fla. DCA 1994).

[12] See e.g. Cincinnati Ins. Co. v. American Hardware Mfrs. Ass’n, 898 N.E. 2d 216 (Ill. App. Ct. 2008); Cincinnati Ins. Co. v. Eastern Atlantic Ins. Co., 260 F.3d 742 (7th Cir. 2001)(noting that “intent to injure” is generally not an element of the tort of defamation).

[13] See Standard CGL Policy CG 00 01 10 01, Section I, Coverage B (2)(a)-(b).

[14] See e.g. Nationwide Mut. Ins. Co. v. Lake Caroline, Inc., 2006 WL 2805140 (S.D. Miss, Sept. 28, 2006).

[15] See e.g. Cincinnati Inc. Co. v. Pro Enterprises, Inc., 394 F. Supp. 2d 1127 (D.S.D. 2005); American Hardware Mfrs. Ass’n, 898 N.E. 2d 216 (Ill. App. Ct. 2008).

[16] See Standard CGL Policy CG 00 01 10 01, Section I, Coverage B (2)(k).

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