Social networking Web sites, such as MySpace, Facebook and LinkedIn, are growing increasingly popular with young people and adults alike. These sites allow people to reconnect with old friends and colleagues and to make new connections. However, as with most other Web sites, these sites allow the posting of communications that the posters may come to regret. These posts can cause hard feelings and may result in significant financial loss.
In the winter of 2009, a teenager from Oceanside, New York sued Facebook, four of her high school classmates, and their parents for $3 million. The suit accused the four classmates of bullying and humiliating her in a forum on Facebook. They allegedly posted derogatory and false statements about her that were intended to hold her up to “public hatred, ridicule and disgrace.” Whether or not the allegations prove to be true, the teenagers and their parents need legal defense and possibly resources to pay judgments against them. They may look to their homeowner’s insurance policies to cover these costs, but will the policies respond?
A standard policy will probably not cover this. The policy pays amounts for which the policyholder (the insured) is legally liable, plus the costs of legal defense, for bodily injury or property damage done to someone else. The policy defines bodily injury as meaning bodily harm, sickness or disease; it defines property damage as injury to, destruction of, or loss of use of physical property. Neither of these definitions includes saying or publishing something that injures another’s reputation or feelings. Consequently, the policy is unlikely to cover a post on Facebook. The girl from Oceanside did not allege that her classmates hurt her body, made her sick or passed her a disease; she accused them of making her life miserable. The policy does not cover that offense.
Insurance companies may offer special personal injury coverage that can be added to homeowner’s policies. This coverage pays for the insured’s liability for several offenses, including oral or written publication of material that violates someone’s privacy. If any of the Oceanside classmates’ parents have this coverage, their insurance may cover the claims.
Another potential source of coverage is a personal umbrella policy. An umbrella provides additional insurance in situations where a loss has used up the amounts of liability insurance under homeowner’s or auto policies. It also covers some liability losses that those policies do not cover, such as personal injury losses. Umbrellas typically carry a deductible of $250 or $500. Suppose one of the parents in the Oceanside case does not have personal injury coverage on his homeowner’s policy, but he does have an umbrella. The umbrella will pay for his and his child’s defense and their shares of any judgment, minus the $250 deductible. If he does have the coverage on his homeowner’s policy, this policy will pay until its limits are exhausted, and the umbrella will pay the rest, up to its limit.
The costs of enhanced homeowner’s policies and personal umbrella policies will vary from one insurer to another. Also, the terms of umbrella policies vary among companies. An insurance agent can provide information on coverage options and prices.
Communicating online has become an ordinary part of life today. Web sites like Facebook offer new and exciting ways to meet new people and to stay in touch with people all over the globe. However, they bring with them their own unique risks. Anyone using sites like these should be careful with what they and their children are saying, and they should make sure they have proper insurance backing them up.