Understanding what’s considered libel
For something to be libelous, the defamatory statement must:
- Present a false statement as fact
- Have been made without attempting to verify if it was true
- Cause harm to someone by damaging their reputation and/or causing them to lose income
- Be communicated to at least one other person
Committing libel is not the same as having a negative opinion about something, though the line between the two can be easy to cross.
For example, it’s perfectly fine for you to write that you had an awful meal at a restaurant on a business’s Yelp page. However, you might not want to claim that you saw rats in the kitchen if you didn’t. Even if you’re incredibly nasty in your review, as long as you’re voicing your opinion, and not promoting false statements as fact, you aren’t committing libel.
Not so fast, though. That said, adding “I think…” to the start of a statement might not protect you from all accusations of libel.
For example, if you were to write a review that said “I think there must be rats all over their kitchen!” you’re doing more than simply stating your opinion, you’re maligning that business with an untrue statement and could find yourself guilty of libel.
Libel vs. slander: What’s the difference?
Libel is often confused with slander. While both are types of defamation where another person or business is harmed by damaging lies, how the lie is told separates the two.
As we now know, libel is defamation that is published. You may have heard the term because celebrities sometimes sue media organizations for making libelous statements. (Though public figures and public officials have to meet a different standard than private individuals to successfully win a libel case.)
Social media is the most significant area of concern regarding libel for most business owners. This is because businesses may have to answer for their employees if they commit libel.
For example, suppose one of your restaurant employees posts something damaging and untrue about a competitor online. In that case, your business could be facing a libel lawsuit from them.
Slander, on the other hand, is defamation through spoken words.
Say you own a construction business and find out that a new service is competing for your clients. To counter their efforts, you go on the local news and say they don’t follow local labor laws. If your competitor can prove they do follow all labor laws, they could have a legitimate case to sue you for slander.
While the first amendment gives Americans the right to free speech, both spoken and written, individuals and businesses also have the right to be protected from having their reputations and good names tarnished by untrue verbal or published statements. Even the U.S. Supreme Court has a difficult time balancing defamation laws with freedom of speech and freedom of the press.
While generally, you won’t go to jail for breaking libel laws, you can be sued in civil court. Defamation lawsuits such as these can end up costing millions of dollars.
Business insurance for libel
Crossing the line between strongly worded opinion and libel is easy to do. As employers may be held responsible for what their employees say or post online, protection from libel is a serious concern for many small business owners.
Luckily, many businesses already carry business insurance for libel, even if they don’t know it.
General liability insurance is often the first policy small businesses purchase because it helps protect against the most common workplace risks like slips and falls and property damage.
What most business owners don’t realize is that general liability can also help cover lawsuits related to libel. Most general liability policies include protection from claims related to reputational harm, which is where libel falls.
So if you (in a heated moment, of course) or one of your employees bad-mouths a competitor online and gets sued, general liability can help with the legal costs and related damages.
How NEXT supports small businesses
At NEXT, we know that small business owners have enough things to worry about. Insurance shouldn’t be one of them.
That’s why we create customized small business insurance packages that offer peace of mind while allowing you to focus on your other responsibilities.
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