Defamation Liability Insurance provides coverage to businesses in the event that they are sued for defamation, which is the communication of false statements that harm the reputation of an individual or organization. Defamation claims can result in significant legal fees and damage to reputation, making Defamation Liability Insurance an important component of an Employment Practices Liability Insurance (EPLI) policy.
One case that highlights the importance of EPLI coverage for defamation claims is the case of Madaffari v. Univ. of Pittsburgh Med. Ctr., 209 A.3d 1129 (Pa. Super. Ct. 2019). In this case, the plaintiff, a former employee, sued her employer for defamation, alleging that her employer made false statements about her work performance that harmed her reputation. The plaintiff was awarded over $1.1 million in damages, including compensatory and punitive damages. Link: https://casetext.com/case/madaffari-v-univ-of-pittsburgh-med-ctr-1
Another case that demonstrates the potential risks of defamation claims is the case of Kelly v. Surface Transp. Bd., 801 F. Supp. 2d 31 (D.D.C. 2011). In this case, the plaintiff, a former employee, sued his former employer for defamation, alleging that his former employer made false statements about him that harmed his reputation. The plaintiff was awarded over $2 million in damages, including compensatory and punitive damages. Link: https://www.leagle.com/decision/infdco20110627e23
Defamation Liability Insurance can help businesses mitigate the risks associated with these types of claims by providing coverage for legal fees, settlements, and judgments. This type of coverage is often included as part of an EPLI policy, which provides broader coverage for a range of employment-related liabilities.
In summary, Defamation Liability Insurance provides coverage to businesses in the event that they are sued for defamation. Employers should consider obtaining an EPLI policy that includes this type of coverage to ensure that they are protected from the potential costs associated with defamation claims. The case laws discussed above demonstrate the potential for significant damages in defamation cases, making it important for businesses to have appropriate insurance coverage.