Unfortunately, the proliferation of social media channels makes it easier for cyberbullies to harass their victims. A whopping 88 percent of teenagers who used social media said they’ve witnessed cruelty on social network sites, according to Pew Research Center’s 2011 Internet and American Life Project.
As a result, property lines insurers face the specter of increased litigation related to cyberbullying events. Electronic aggression lawsuits resulted in verdicts with awards of $87 million in 2012, according to . When the culprit was a minor in those cases, the parents often sought financial support from their homeowner or personal injury insurer.
Carriers typically face ambiguous and outdated policy language, plus coverage solutions that are too broad in their scope. Insurance companies can consider these three coverage options to manage electronic aggression risks:
1. Restricted policies. Carriers can virtually eliminate the potential for cyberbullying-related claims with this policy. In this type of policy, potential gaps that might otherwise allow a claim under either a personal injury umbrella or a homeowner’s endorsement have been filled. Definitions related to the publication of material (whether oral or written) are removed or added to the existing list of exclusions. References to libel, slander and defamation are also gone. “Electronic means” is clearly defined, and “subsequent or indirect sharing, forwarding, posting or linking of direct communication of an insured” is redefined as one offense rather than separate offenses. Additional exclusions further limit the policy’s reach. Bodily injury and property damage resulting from electronic aggression are excluded, as are occurrences resulting from physical or mental abuse. Intentional and criminal acts are also excluded. Language denying coverage, even if the insured is unaware of the offense—a not uncommon occurrence when it comes to the actions of minors—replaces the standard verbiage. Note, however, that if domestic violence comes into the picture, some states may require a provision that allows for coverage. Carriers may choose to continue to include libel, slander or defamation under a personal injury umbrella, but restricted policies should have some exclusions: the publication—again, either oral or written—of materials that are known to be false or where the publication occurred prior to the policy period; actions that are known to violate another person’s rights; and actions conducted through electronic media that result in injuries.
2. Semi-restricted policies. Carriers mitigate their risk without eliminating the coverage available to policyholders with this policy. Exclusions and more restrictive definitions fall under the personal umbrella policy or the homeowner’s endorsement. Persistent and continual bullying is excluded; coverage is intended once only. Smaller liability sub-limits allow for better risk management while still continuing coverage for property damage and personal/bodily injury. Defense costs may also be limited. And regardless of the number of injuries or damaged parties, policy limits continue to be the final word on payable damages. The severability clause remains intact, but adds a provision limiting liability for any single occurrence or offense. Civil fines, penalties and punitive or exemplary damages are also excluded. A due diligence section may be added or expanded that requires insureds to monitor household minors’ use of electronic media. Acts committed by non-minors as defined by the policy are also excluded.
3. Non-restricted policies. In a cyberbullying incident, a carrier’s exposure is limited with a non-restricted policy. Persistent and continual bullying isn’t excluded. No maximum limit is set for the coverage of defense costs. Damages are covered up to the limit of the policy or endorsement. Limits exist, however, for penalties and statutory fines, which are covered up to the lesser of either the limit opposed by the governing authority or $10,000. Similar to the semi-restricted policy, this coverage contains severability and due diligence clauses, and the exclusion of acts committed by those who are no longer minors.
Policyholders’ needs may evolve over time, but carriers can mitigate their risk exposure nad customize their policies to match a client’s risk profile with a range of options in place.
Matt Cullina is chief executive officer of IDentity Theft 911.