Social media is beyond just emerging now – in fact it is exploding, pervasive and entering many aspects of our lives including Personal Lines insurance. As articulated in the previous blog on this topic, while parents may be concerned about their children's online activities, they are not actually thinking about the issue from a risk management and insurance perspective.
A claim could be imposed against the parents from several aspects with respect to social media including for negligence to supervise their children's online activity. Hence, it is imperative to understand how your Homeowners and Personal Umbrella policies address this risk.
When we talk about claims related to social media, which is quite new in the gamut of liability coverage, we are actually looking at a different type of injury - libel, slander and violation of privacy and integrity - in short, ”personal injury”. You need to know that personal injury is not covered under a standard Homeowners policy.
Even the broadest form of Homeowners policy (HO 5) provides coverage for bodily injury and property damage only under the liability section. Lawsuits falling under the category of defamation, cyber-bullying, invasion of privacy do not come under the definition of "bodily injury" of the policy. Coverage could be available, depending on the facts of the case, by purchasing a “Personal Injury Endorsement”, however it may contain a number of exclusions so it must be analyzed and reviewed in order to determine the extent of the personal injury coverage provided.
When purchasing this endorsement, you should also know that exclusions could limit coverage if personal injury is a result of or caused by the following:
- An insured with knowledge that the act would violate the rights of another and would inflict "personal injury";
- With knowledge of falsity;
- Criminal act;
- Sustained by a person as a result of an offense directly or indirectly related to the employment of this person by an insured.
Although, "actual" defamation actions and cyber-bullying are not covered under the endorsement, coverage could still be available if a lawsuit contains an allegation of negligent supervision against the parents of the child. In such cases, insurance would only provide a defense and cover for the parents’ negligent supervision and not for the defamatory actions. In order to address this growing trend, insurers are adding exclusions for any claim for damages of negligent supervision arising out of electronic communication. They are also adding “electronic aggression” exclusions to the Personal Injury Endorsement.
Lawsuits pertaining to social media are constantly evolving and, insurers are staying informed of legal developments. As the courts issue opinions interpreting coverage, insurance companies will be proactive in adding definite exclusions to your standard Homeowners policy.
An independent professional can help you stay in tune with the technological evolution and risks that come with it, as well as advise you on ways to mitigate these risks as an insurance policy alone may not provide adequate protection. The next blog in our series will discuss mitigation tools that have been introduced in response to parental liabilities associated with social media activities of their children.
To discuss how you can protect your property against possible claims arising from your child’s use of social media, please free to contact Purnima Rangarajan at 732.395.4262 (firstname.lastname@example.org).