Even frivolous lawsuits dismissed at a relatively early stage of the litigation can be expensive to defend, and the cost skyrockets the longer the litigation continues, particularly if judgment is rendered against you. While most lawsuits never get to trial, if you lack the money to carry out a vigorous defense, the only option available to you may be to settle (perhaps even to take down the allegedly offending content or even your entire site) regardless of the merits of your defense.
For these reasons, it is important to assess whether your online activities are covered by your existing homeowners or renters insurance. If your activities are not covered, it might be worth getting media liability insurance, even if such policies initially appear to be prohibitively expensive. Alternatively, if your online activities are part of an existing business, you may be able to add coverage to your business insurance policy through an add-on rider. Consult your insurance agent for costs and details.
Here are a list of steps to take when evaluating your insurance coverage needs:
- Carefully review your existing insurance policies to see if claims related to your online activities are covered (e.g., claims for libel, invasion of privacy, copyright infringement). Review the section on Homeowners and Renters Insurance Coverage in this guide for help in making this determination.
- If your current insurance policies don't cover you, consider switching to another carrier that will provide coverage. See the section on Evaluating Homeowners and Renters Insurance Policies for guidance.
- Consider whether your state's law excludes coverage for your specific activities. This is especially important if you make any money from your online activities. See the section on Insurance Exclusions for Business Pursuits for information.
- If your state excludes coverage for business pursuits and you make sufficient money from your site to be excluded, carefully weigh whether the income you receive is worth the loss in coverage.
- Consider whether media liability insurance might be a better option (for many, it may be prohibitively expensive, but the coverage can be quite comprehensive). See the section on Media Liability Insurance for help.
To help you determine what type of insurance may be right for you, we've created an interactive question tool for evaluating your insurance options.
