As the economy fosters more ad revenue for student newspapers, many editorsand general managers are considering an investment in libel insurance.Libel insurance, which provides liability coverage for media if they aresued for libel, can protect the financial stability of a media organization.Many critics, however, say coverage is often unnecessary — especiallyfor smaller papers.
Kelly Wolff, general manager of the Educational Media Company at VirginiaTech, which publishes three student publications and operates a student-runtelevision and radio station, said she was glad the company had insuranceboth times it was sued for libel.
Although the lawsuits were both eventually thrown out on appeal, Wolffsaid having insurance gave the company peace of mind.
“I think that is the reason for having it,” Wolff said, “Mistakes happen.People can sue somebody whenever they want to, whether they really havea case or not.”
Wolff would not disclose the particulars of the company’s policy withthe Arizona-based Scottsdale Insurance Company, but said the paper’s totalyearly budget is between $600,000 and $700,000.
“If our corporation lost a lawsuit that wasn’t covered by insurance,we might not exist,” Wolff said. “I don’t think it would make a lot ofsense to operate without it.”
The Daily Collegian at Penn State University has had libel insurancethrough Bermuda’s Mutual Insurance Company since 1989.
The Collegian, which has an annual budget of $1.7 million, iscovered for $2 million per event. The deductible is $10,000 in additionto the premium, which is $4,308 for the current year. The policy coversthree publications produced by The Collegian and a Web site.
“It gives us a level of security,” said Patricia Hartranft, Collegian operationsmanager.
But Hartranft said it is important not to give anyone a reason to filea libel suit.
“We don’t say, ‘Oh well let’s just run with it because we are insured,”said Hartranft.
Nancy Green, vice president for communication at Georgia Global LearningOnline for Business and Education, an online learning initiative of theUniversity of Georgia, believes that libel insurance can do more than protectthe budget of a student media corporation.
“[Having insurance] stands as a signal that you are sincere and alsovery professional in the way you approach your coverage and the work thatyou do,” she said.
But others argue that some publications may be wasting their money onlibel insurance and could even be encouraging lawsuits by joining forceswith a company that has deep pockets.
“Successful lawsuits against college newspapers for libel are extremelyrare,” said James Tidwell, media law committee chair for College MediaAdvisers. “All things being equal, it is probably not a good use of resources.”
“In small operations, it wouldn’t be worth the money you would spend,”Tidwell said.
He also said that in theory, having libel insurance could encouragepeople to proceed with a lawsuit they otherwise would not pursue.
Green said most people who would sue for libel probably would not knowwhether the publication had insurance.
“Normally you don’t put on your masthead that you have libel insurance,”Green said.
While Green and Tidwell agreed that libel insurance for smaller publicationsmay not be financially prudent, or even possible, the general consensusamong media law experts is that for larger media organizations, libel insuranceis worthwhile. Green said any publication that generates more than $750,000a year should consider investing in libel insurance.
View a list of libel insurance providers available from our legal resource center.