The modern world provides more opportunities than ever before to damage someone's reputation through harmful words. Whether it's social media, online reviews, advertising, word of mouth, local news outlets, or videos going viral, you could be accused by anyone at any time of making some kind of defamatory statement. 

This means the right insurance coverage is vital for many Americans. To help you ensure you have this protection, here are some answers to your questions. 

What Is Defamation? 

Defamation is a false statement that injures the reputation of a third party. It's generally divided into two categories. Libel is defamation in the form of something written. Slander is defamation in a spoken format. To be actionable, the defamation generally must be an untrue statement, be somehow published to a third party, has caused harm, and has caused financial loss. 

Does Insurance Cover Defamation?

The good news for both individuals and organizations is that a few key types of insurance cover defamation. Some homeowners insurance policies include protection against defamation suits in their personal liability coverage. You may need to add an additional endorsement to obtain this injury coverage.

For businesses, general liability insurance coverage commonly includes some level of defamation coverage. Accusations of defamation are considered a type of liability similar to accusations that you caused property damage or bodily injury to a client or other outside party. 

Both businesses and individuals can also increase their protection through an umbrella policy. Umbrella policies kick in when limits are reached in lower level, or primary, insurance coverage (such as homeowners or business owners coverage). This is very important because it adds a more thorough and higher limit protection against things like protracted, more expensive lawsuits. 

What Does Insurance Pay For?

Just because your insurance covers defamation doesn't necessarily mean you have no financial risk. If defamation is covered, it nearly always includes the payment of defense costs. This is known as the insurer's duty to defend. This defense generally must be reasonable and include competent representation. 

What about damages if you lose the case? Your policy will state whether or not it pays for any judgment. If it does, this generally has a specified dollar limit. And you may be required to accept reasonable settlement offers to limit the financial risk to the insurer.

Where Should You Start?

The best way to learn more about defamation coverage as a part of your overall liability insurance protection is to meet with a qualified insurance agent in your state.