With the rise of social media, IT businesses and contractors are now more vulnerable than ever to libel lawsuits.
What is libel? Libel occurs when one party writes something damaging and potentially harms another party's reputation. In the past, newspapers and magazines were often the subject of libel lawsuits. Yes, it's true – many years ago we actually had newspapers and magazines that were financially solvent enough to be worth suing.
Now, Twitter, Facebook, and other social media expose business owners to the same libel liability. Despite the off-the-cuff nature of social media, businesses should consider those communications as "on the record," because they can be sued for libel when they speak poorly of vendors, clients, or business partners.
Let's look at an example of an independent contractor that emphasizes precisely the risks social media libel poses for small businesses.
The $82,630 Tweet: News Story Highlights Libel Dangers for Freelancers and Small Businesses
A British freelancer was sued for complaining about her client on Twitter. Lesley Kemp had a fair complaint: the client hadn't paid her on time.
After seeing her disgruntled tweet, Kemp's client launched a legal assault on her, filing an aggressive libel suit alleging $82,630 in damages. That's an expensive tweet: $590 per character.
Luckily for Kemp, a small business advocacy group specializing in libel cases reached out to her and helped. Together with her new legal team, she began preparing a defense.
While it’s not something most of us like to think about, small businesses and freelancers can be "bullied" by their clients. Clients and larger businesses tend to have more legal resources and might overact and file lawsuits precisely because they know freelancers don't have little or no money defend themselves. The party suing may hope to bankrupt a business or pressure its owner to agree to a settlement rather than fund an expensive court battle.
Here’s some good news: after a year stressing about the potential trial, Kemp’s legal team was able to convince her client to drop the suit, meaning that Kemp didn’t have to pay an exorbitant sum for her Twitter complaint.
Lesley Kemp's case highlights two important takeaways:
- Lawsuits eat up a lot of time. This suit didn't even go to trial, but Kemp still spent a year of her life preparing for the case and worrying about how it was affecting her life, business, and reputation.
- Small businesses need to be ready to fight back. Having business liability insurance doesn't just mean you're covered in case of a lawsuit; it means you're ready. If you don't have insurance and you're sued, you'll have to scramble to find lawyers and might even have to go into debt to pay them. With insurance, you'll call your agent and immediately begin working with professionals who've been there before and know how to protect you in court. Oh, and you won’t have to cover the bills out of pocket.
General Liability Insurance Protects Small Businesses from Libel Suits
Small business insurance can protect tech contractors when they damage a client's property or their reputation, which includes social media libel suits.
Much like the freelancer we discussed above, a tech contractor may be sued for libel or other damages by a former client with more resources at their disposal. But General Liability Insurance can level the playing field and give tech contractors immediate access to lawyers and resources to help them fight off a lawsuit.
To get a free quote on small business insurance, fill out our interactive online insurance application.