An Insured Posts Defamatory Remarks on the Internet. What's the Biggest Verdict You Would Expect?
In past publications I’ve discussed how electronic communications have changed Personal Injury exposure coverage that is available under Homeowners and Personal Umbrella policies as well as provided under Commercial General Liability (CGL), General Liability (GL) and Commercial Umbrella (CU)coverage.
Recently, a Florida judge handed down one of the most expensive verdicts, to date, for online defamatory postings in Lennar Corp. v. Briarwood Capital LLC, 2008-055741-CA-01, Florida Circuit Court, Miami-Dade County.
In this case a developer alleged in online postings that home builder Lennar cheated him out of millions of dollars. Lennar sued for defamation and extortion, alleging that the developer's online attacks, which alleged corporate fraud, damaged the home builder's reputation and stock price. The verdict, against Nicolas Marsch III as an individual, and his company, Briarwood Capital, after five years of litigation includes $802 million in compensatory damages and $200 million in punitive damages.
Potential insurance coverage for this verdict was not discussed in any of the articles I’ve read about the case, so it is unknown as to whether the defendant had Personal Injury under his Homeowners policy or if he had a Personal Umbrella policy. It would seem reasonable to assume his company Briarwood Capital had CGL and possibly CU coverage in place - but this is only my assumption. In any case, even if all of these policies responded, it is very unlikely that there would be anywhere near $1B in limits.
My point is that posted defamatory remarks, whether in e-mails or posted onto social media websites, texts or tweets can result in costly claims. While this recent $1 billion verdict stands out, there are several other million-dollar-plus verdicts that have been handed down by courts across the country.
Traditionally, there was not much in the way of losses driving any need to underwrite or charge much of a premium for Personal Injury offenses for published defamatory remarks or information that violated someone’s right of privacy - in either Personal or Commercial Lines policies. The exposure has clearly changed.