I recently signed a contract to be a contributor at a digital news site. I hesitated, however, because the contract included an indemnification clause, which the editor said could not be altered. Basically, I promise not to write anything false, defamatory or plagiarized and agree to hold the digital platform harmless if someone sues because I violated those promises. In other words, I’m responsible for legal fees and the cost of any settlement or judgment.
I decided to accept the contract for two reasons. For one, the clause was not a blanket indemnification, meaning I wasn’t holding the digital platform harmless for any and all claims against my stories. Secondly, I thought the stories I would be writing about, mostly medical studies, put me at low risk of being sued. (See my tip sheet about negotiating freelance contracts.)
Although this particular indemnification clause was palatable, the experience made me curious about purchasing media liability insurance.
What is media liability insurance?
Sometimes called libel insurance or errors and omissions insurance, media liability insurance is a specialized commercial policy that covers the risks of creating and disseminating media content.
Do freelance health care journalists need media liability insurance?
Freelancers need to weigh the nature of their reporting and risk of being sued, the relationship they have with publishers and the cost of insurance.
What risks does media liability insurance cover?
Some of the covered risks include:
- Defamation.
- Invasion of privacy.
- Copyright and trademark infringement.
- Trespass or wrongful entry.
- Breach of duty or confidentiality.
- Plagiarism.
- Negligent or intentional infliction of emotional distress.
- Defective advice.
What companies offer this type of insurance?
“We do business with about 23 companies that offer media liability insurance,” said Mike Mansel, an insurance broker and certified insurance counselor with InterWest Insurance Services who specializes in media liability insurance. Those companies include AXIS, Chubb and CapSpecialty. Europe-based ANV Global Services recently opened a U.S.-based office for media liability insurance, which started offering policies on Nov. 2.
Two popular insurers have left the business. In October, Intact Specialty Solutions stopped offering new media liability insurance policies, and in December 2022, Dinghy/NSM Insurance Group announced it would no longer write these policies.
Nevertheless, “We really don’t have issues finding insurance companies to write policies for media,” said Mansel.
Can freelancers buy a media liability insurance policy directly from an insurance company?
No, freelancers must go through a retail insurance broker. There are some who specialize in media liability insurance, such as Mansel. But a non-specialist broker, even one unfamiliar with media liability insurance, should be able to provide a quote by working with a wholesale insurance broker. Wholesale brokers have experts in niche markets and act as the go-between for retail brokers and insurers.
Professional membership organizations sometimes offer discounted policies. For example, the National Federation of Press Women offers discounted libel insurance to its premium members. In December 2022, the Authors Guild discontinued its libel insurance program with Dinghy but says on its website that it is in talks with other insurers.
What does media liability insurance cost?
The cost depends on how much insurance coverage a freelancer requests, how risky their reporting is, who they write for and whether they have ever been sued. Insurers weigh all these factors and more when writing a policy, Mansel said. Belonging to a professional association helps, especially if it is selective about membership, he said.
Premiums are also based on a journalist’s or media company’s annual revenue. “And the first tier of revenue for pricing purposes generally goes up to a couple million dollars … so that an organization or journalist making $100,000 a year would pay the same as a $2 million organization,” said Chad Milton, partner at Media Risk Consultants, which advises brokers, insurers and publishers about media liability insurance. For example, a freelancer might have to pay as much as $3,500 annually or more for $1 million in coverage from any of the major insurers, said Milton.
And premiums have been rising over the past several years because of an increase in litigation and legal fees, said Mansel.
Policies also have a so-called retention. That’s the amount the insured would pay to cover legal fees and settlement or judgment costs in the event of a claim before insurance coverage kicks in. It can start at $5,000 for a freelance writer, said Regina Williams, a media liability insurance specialist and former insurance company executive.
“If the work is investigative in nature, it could go up, beginning with a minimum of $10,000,” she said. That’s because insurers consider investigative reporting riskier and more prone to lawsuits.
Who picks the lawyer in case of a claim?
The insurance company usually selects the lawyer unless it is written into the policy that the insured can choose. The handful of insurers that write most of the media insurance policies only choose lawyers with expertise in media law, said Milton, adding that the insurance companies also have made deals with these lawyers to lower costs.
What is an occurrence policy versus a claims-made policy?
An occurrence policy will cover a claim regardless of when it is made. “The claim might be made years later, but it’s still covered under the policy that was in place when the story was written,” said Milton, adding that freelancers should always try to purchase an occurrence policy.
A claims-made policy, which is offered less frequently, is the opposite. It covers claims that are made when the policy is in place.
“If you think there is a chance you’re going to get sued until the statute of limitations runs [out], which might be one, two or three years after publication, then you would have to continue to buy the insurance policy to cover the stories you’ve already written,” Milton said.
What is a hammer clause?
A hammer clause can compel or strongly encourage the writer to settle a claim. For example, if a journalist wants to go to court and not accept a settlement, a hammer clause might allow the insurance company to pay the freelancer half of the potential settlement amount and then wash its hands of the claim. The journalist would use that money to pursue the case in court but would have no further financial support from the insurer.
Hammer clauses are less common than they used to be, said Milton. “And sometimes there’s a middle ground where the insurer limits the coverage a little bit going forward, but it will still have a duty to stay in the case even at a lower level,” he said.
What is the difference between legal defense inside the limits and outside the limits?
With a defense inside the limits policy, the legal costs go toward exhausting the policy; so there might not be money left to pay a judgment or settlement. In a defense outside the limits policy, the coverage amount only applies to the settlement or judgment. “The insurance company takes on the duty to defend the claim without limit,” said Milton.
“In today’s marketplace, there are not too many carriers that are offering defense outside the limits because of the litigious state we’re in and legal expenses being higher than they were five to 10 years ago,” said Williams.
