Nearly every business owner realizes the importance of protecting the organization from claims of bodily injury from other parties. But there’s another category of liability that can also lead to expensive claims. “Personal injuries,” as defined in the typical liability insurance policy, are wrongful acts, that result “in injury to another’s person, property, reputation, or the like, and for which the injured party is entitled to compensation,” according to Dictionary.com. They do not involve bodily injury but can be just as damaging to a person or entity. They are considered torts, or non-criminal wrongful acts.
Victims of torts can sue for compensation if they can prove the tort led to a loss or harm. The standard commercial general liability policy covers these personal injury torts: claims of false arrest, detention, or imprisonment; malicious prosecution; wrongful eviction; slander; libel; and invasion of privacy. Law enforcement agencies often deal with these sorts of claims.
What do each of these terms mean for a business?
False arrest, detention or imprisonment: This means arrest, detention or imprisonment without just cause. In private industry, this sort of claim would most often occur against a private security firm.
Malicious prosecution: Malicious prosecution occurs when a party brings baseless and malicious litigation against another without probable cause. Sometimes individuals or companies will file lawsuits for the sole purpose of harassment or silencing opponents.
Wrongful eviction: Wrongful eviction occurs when a landlord evicts a tenant without following the legal requirements set by the state and city. Property managers or property owners that lease property, even if incidental to your main business, face the possibility of wrongful eviction claims.
Slander and libel: Slander and libel are both forms of defamation, or the making of false statements about another person or entity. These statements either harm a reputation or confidence or are disparaging or hostile. When defamation is spoken or heard, it’s called slander; when it’s printed or broadcast in visual form, it’s called libel. To prove defamation, the plaintiff must prove the statements were false, that they were “published” or heard by at least one other person besides the person or entity being defamed, and that the publisher acted negligently in publishing them. Any business with an active online presence must take care to avoid making defamatory statements against other people or entities.
Invasion of privacy: Invasion of privacy is the wrongful intrusion into another’s private life. It can involve the intrusion of another’s solitude, public disclosure of embarrassing private information, publicity that paints a false picture of that person to the public, or the appropriation of a person’s name or likeness for commercial or personal advantage.
People who claim invasion of privacy must have a reasonable expectation of privacy for their claim to be valid. For example, a person who goes nude in public has no reasonable expectation of privacy, but someone who’s caught nude by a peeping Tom or paparazzo in their own home does. Celebrities and other public figures have a diminished right to privacy, since they have placed themselves in the public arena.
The commercial general liability policy and business owner policy are designed to respond to a wide range of liability claims. However, some businesses might need additional or specialized coverage.