Personal injury coverage: libel, slander and false arrest

In insurance, "personal injury" does not mean a physical injury. It is a list of non-physical wrongs: libel, slander, invasion of privacy, false arrest, malicious prosecution and wrongful eviction or entry. A standard homeowners liability section covers only bodily injury and property damage caused by an accident, so a defamation or privacy lawsuit against you is outside it. The personal injury endorsement, ISO form HO 24 82 and its insurer equivalents, adds those offenses to your liability coverage and brings with it the duty to defend you.

What the standard policy leaves out

Coverage E (personal liability) in the ISO HO-3 responds to claims for damages because of "bodily injury" or "property damage" caused by an "occurrence," which the form defines as an accident. Damage to someone's reputation, privacy or freedom of movement is neither. If a neighbor sues you over a post you wrote, the standard section gives you neither a defense nor payment, and the cost of the lawyer is yours. The wider picture of Coverage E is in Personal liability coverage (Coverage E) explained, and the exclusions are in Liability exclusions: what Coverage E won't pay.

What the endorsement adds

The copy of HO 24 82 read for this guide is an April 1991 edition posted by AAA. It defines personal injury as injury arising out of any of these offenses:

1. False arrest, detention or imprisonment, or malicious prosecution.
2. Libel, slander or defamation of character.
3. Invasion of privacy, wrongful eviction or wrongful entry.

The mechanism is simple. The form amends the definition of "bodily injury" in Section II to include personal injury, so the same insuring agreement, defense obligation and Coverage E limit apply. It is sold for an additional premium. Editions have changed since 1991; a form summary on InsuranceXDate describes the March 2022 edition as listing publication that slanders or libels, disparages goods or services, or violates privacy, and adding an exclusion for home-sharing host activities. Read the edition attached to your policy.

What the endorsement excludes

The 1991 edition excludes liability assumed under a contract (with a premises exception), injury caused by a violation of a penal law, injury connected with employment, injury arising from a business of an insured, civic or public activities performed for pay, and injury to an insured. An Insurance Journal Academy article by Christopher Boggs adds that the ISO form excludes material published by or at the direction of an insured who knew it was false, and material first published before the policy period (Insurance Journal, 2015). That article also explains that courts generally treat the injury as occurring when the material is first published, so the policy in force on that date responds. Exact exclusions differ by edition and insurer.

These exclusions give the insurer room to dispute a claim. Insurers often defend a suit while reserving the right to deny payment of any judgment, so expect a reservation of rights letter if a claim alleges you acted knowingly.

Who should care

Claims under this coverage are uncommon, and most people will never use it. The reason to consider it is that a baseless suit is still expensive to defend, and the defense is what the coverage buys. It is most relevant to:

• People who post online. Boggs's article lists tweets, Facebook posts and Yelp reviews as exposures, including posts that are true, because a defamation claim can be filed over any of them. Neighborhood forums and community groups belong on that list.
• Neighbors in a dispute. Calling the police, reporting someone to a code office or accusing a person of a crime are the kinds of acts that can lead to false arrest or malicious prosecution claims.
• Owners with cameras or drones. Pointing them at a neighbor's windows invites an invasion-of-privacy complaint. See drones, firearms and other liability gray areas.
• Landlords and owners with a roomer. Wrongful eviction is on the list. See renting out a room: what your homeowners policy covers.
• Volunteers on association boards. Unpaid roles are not excluded in the 1991 text, but a board's own directors-and-officers coverage is a better first line, and the endorsement is not a substitute for it.
• Parents of active teenagers. Social media posts by a resident minor can generate claims against the household.

Business activity is the major carve-out. If you review products or run a blog for money, or have a home-based business, the policy's business exclusions may apply. See running a business from home: the insurance gaps.

Where it comes from and what it costs

Some insurers sell it as a stand-alone endorsement. Others fold it into a package or a higher-end form:

Boggs's 2015 article put the stand-alone ISO endorsement at $13 to $25 a year depending on the liability limit, a dated range, so ask for a current quote. Note that a package may carry its own limit instead of the Coverage E limit, as the Florida Peninsula example does, so a $100,000 figure is not interchangeable with a $300,000 liability limit.

Umbrella policies

Personal umbrella policies usually cover personal injury as well as bodily injury and property damage. IRMI's glossary describes the umbrella as covering personal injury, including libel, slander, false arrest and invasion of privacy, on top of home, auto and watercraft liability (IRMI). That can be the more economical route if you already carry an umbrella, with two cautions. Umbrella forms define personal injury differently, so read yours. And an umbrella may pay only above a retained limit, which leaves a gap if your underlying homeowners policy doesn't cover the offense at all. See umbrella insurance for homeowners: what it adds and where it stops and the How much liability and umbrella coverage do I need?.

A hypothetical example

Say a neighbor sues you for $75,000, claiming that a post you wrote in a community group falsely accused them of dumping waste. You hire a lawyer, and the first year of defense runs up fees. With no personal injury coverage, you pay those fees, any settlement and any judgment. With the endorsement, you notify the insurer, it appoints a defense lawyer and it pays within your Coverage E limit, say $300,000, unless it reserves rights because the suit alleges you knew the post was false. The coverage does not make the suit go away. It pays for the response.

Questions to ask before you add it

1. Is it the ISO endorsement or the insurer's own form, and which edition?
2. Which offenses are listed? Do they include disparagement of goods or services?
3. What is the limit, and does it share Coverage E or sit separately?
4. Which exclusions apply: knowing falsity, prior publication, business, home-sharing hosts?
5. Does the coverage turn on when the statement was first published?
6. Who is an insured, and does that include a resident minor?
7. Does my umbrella already cover personal injury, and does it have a retention?

If you are threatened or sued

1. Do not reply to the other side, and do not delete posts or messages without legal advice, since they may be evidence.
2. Notify your insurer and agent at once and send the demand letter or summons. Late notice can jeopardize coverage.
3. Do not admit fault or negotiate on your own.
4. Read any reservation-of-rights letter and ask whether you are entitled to independent counsel.
5. Check your umbrella policy and notify that insurer too.

For the full process, see what happens when someone sues you after an injury at your home.

Key takeaways

• "Personal injury" in insurance means libel, slander, invasion of privacy, false arrest and similar wrongs, not physical harm. The standard HO-3 does not cover them.
• The HO 24 82 endorsement adds those offenses to Coverage E, with the same limit and defense obligation.
• Exclusions for knowing falsity, business activity, prior publication and contracts limit it, and wording varies by edition and insurer.
• The main value is paying for a defense against claims that may be weak but are expensive.
• Check whether a package or your umbrella already provides it before you buy it separately.