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Don't Sell Ads on Your Blog:

Just a friendly public service reminder, prompted by a brief conversation I had over the weekend: If you (1) make only a little money by selling ads on your blog (or having a tipjar), and (2) you have homeowner's insurance (or, in some instances, renter's insurance), and (3) you worry about the possible risk of defamation lawsuits, invasion of privacy lawsuits, and the like -- and the expense of defending the lawsuits even if you ultimate prevail -- consider going entirely noncommercial.

As I discussed three years ago, many homeowner's insurance policies cover you for libel, invasion of privacy, and the like, including for the costs of defending the lawsuits. But they generally expressly exempt liability that's based on your "business pursuits," which may include even those pursuits on which you make a pittance.

So check your insurance policy, and if it fits the description I give, check your ad and tip income. If it's, say, only $250/year after taxes, ask yourself: Would I spend $250/year to buy insurance against libel and invasion of privacy liability (and defense costs)? If your answer is yes, then consider giving up any business aspect to your blog, which will give you insurance coverage in exchange.

KS Augustin (mail) (www):
Dear Prof:

I am a romance author with wide-ranging interests, and this post is particularly relevant, especially as several romance authors are looking at the idea of hosting ads in order to make a bit of dosh on the side.

I'm just after clarification: I presume that if you're using a web app with 'sponsored links' (such as the social network sites), then as long as you're not making any money from those ads, you're still in the clear (i.e. one's policy would not be voided)...? Would this be correct, or is there some other nefarious insurance clause we should look out for? One can never be too sure when dealing with insurance companies. (Of course, I will be recommending reading the policy in minute detail, in any case.)
3.10.2008 9:48am
henri (mail):
might it not be better to just use whatever ad income you might earn to purchase a separate insurance policy against defamation etc.? The last thing I would want to do is to use my home owner's insurance to defend this. Your rates would likely go sky high after doing so.
3.10.2008 9:56am
blogger:
EV,

have you ever been sued or threatened with suit for a VC post?

I had a guy email me and threaten to report me to the Bar, because I blogged about his case and suggested it came out wrong and that the supreme court was likely to reverse. (Evidently his attorney advised him he had no defamation case against me because I never got a letter from the lawyer.) He claimed it was making it difficult for him to find a job.

I told him to forget it. He sent me a few more emails, and eventually I decided to delete the post. It got almost no traffic anyway. He later sent me a semi-nice email, so it was all good.

Had he sued me, it probably would have been fairly simple to just defend it myself.
3.10.2008 10:34am
Tracy Johnson (www):
3.10.2008 10:46am
Marke (mail):
How easy is it to buy this kind of media insurance? I operate a blog via a corporation, and my bank, through their business services unit, sells or acts as an agent for business insurance, but only for certain strictly defined types of businesses. No media insurance (libel, etc.) and no internet insurance (loss of income due to hackers).

A Web search didn't turn up anything either.
3.10.2008 12:17pm
Tony Tutins (mail):
Does Pajamas Media shield the Conspirators from liability? There are currently four ads on this page: Oreck, coolsavings, LG and Blockbuster, plus a request for donations via amazon honor system.
3.10.2008 12:35pm
Caspar the Friendly Guest:
Or better yet, move to California, where you can file a SLAPP counterclaim and force the plaintiff to pay your attorney fees. More states need SLAPP laws.

In addition, I think it would be very easy for a blogger to find pro bono representation. These cases are sexy. Were I a commercial blogger, I'd keep my money and take my chances.
3.10.2008 12:55pm
Aaron Street (mail) (www):
If you're blogging for income, can't you solve this problem by running your blog through an LLC?

If the blog only generates $250/year, maybe it's not worth the filing fee and paperwork, but the tax benefits could justify it.
3.10.2008 12:59pm
Alan P (mail):
Speaking of defamation law suits for postings

http://www.abovethelaw.com/anthony_ciolli/
3.10.2008 1:00pm
gattsuru (mail) (www):
Aaron Street, I don't believe that the average homeowner's insurance would provide any insurance for risks related to a business started in the residence, especially regarding legal fees. Limited Liability Company laws tend to also not shield the manager or members against actions that were intentionally fraudulent, reckless, or illegal, or which the LLC owner personally did and resulted in 'injury'. Moreover, if you don't demonstrate that the LLC was treated as a separate entity, you'll lose all related protections, and that requirement typically requires a decent amount of funding be invested in it to cover all reasonably expectable costs and liability.
IANAL, though, so your mileage may vary.

Generally speaking, you'll also find courts to be a lot more favorable toward individuals than to companies; beyond the recognition that commercial speech is less 'worthy' of first amendment protection, there's simply a notable internal bias that can't be ignored.
3.10.2008 1:31pm
Eugene Volokh (www):
Aaron Street: The human being who commits a tort (whether it's libeling someone, negligently hitting someone with a car, or a variety of other things) is, generally speaking, legally on the hook for the tort. His employer might also be responsible; so might the LLC through which he operates; so might others who helped him in certain ways, or are associated with him in certain ways. But he remains potentially liable, and if there are no deeper pockets, he may have to pay the damages award (and defend the lawsuit) himself.

Gattsuru: You may be right that courts are more sympathetic to individuals, but I should note that both individuals and companies may engage in commercial speech -- an individual professional's promoting his services, for instance, qualifies -- and both may engage in noncommercial speech, such as publishing news reports or opinion articles. "Commercial speech" roughly means "commercial advertising," and turns generally on the content of the speech, not on whether the speaker is an individual or a company.
3.10.2008 2:54pm
Caspar the Friendly Guest:
Another downside to an LLC is that you will need to hire a lawyer in order to defend the suit, whereas an individual can defend pro se.
3.10.2008 4:46pm
Bill Poser (mail) (www):
Suppose that you don't have ads on your blog but your blog is part of your web site and other pages have ads. Does that make you liable, since in some sense the site is "commercial", or is it sufficient that the blog itself has no ads?
3.10.2008 5:06pm
Eugene Volokh (www):
Bill Poser: Can't tell you with any confidence, especially since the interpretation of "business pursuits" may vary from contract to contract, and does vary in some measure from state to state (and since I'm not an expert on insurance law; I just know enough to flag this issue for readers).
3.10.2008 8:06pm
Shawn Levasseur (mail) (www):
I make pennies a day off of ads on my site. I use the proceeds to buy similarly cheap ads on other sites to promote my site. So you have my attention with the risk I may have here.

But to what extent is someone really at risk? How many individuals get sued for their blogs?

Being of the opinion that anything worth doing is worth doing for money, I find this a little disheartening.
3.11.2008 3:13am