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I came across an article while reading our July 2012 issue of Rough Notes magazine and I felt it was important to share a few thoughts with our customers and blog readers.  This article is one of those that can cause a person to swallow hard and take a deep breath.

The primary point of my thoughts is:  Always know what your children are doing online – what they’re saying on social media sites, what they’re tweeting about and who they’re talking about.  If they are involved with cyberbullying, it can cost YOU (the parents) your life’s savings, your home, cars and personal possessions.  All too often, parents learn about the actions of their children after-the-fact … when the legal proceedings begin. 

So, what is cyberbullying anyway?  According to the article's author, Donald S. Malecki, CPCU; “Cyberbullying usually occurs because some youths, particularly those with greater strength and power than their victims, think it is a lot of fun to torment others.  The more these bullies are successful in what they do, the more they continue to do it.  They often persuade their friends to participate.”  Victims of cyberbullying can suffer emotional distress, mental injury and, unfortunately, even take their own lives rather than face the resulting embarrassment and trauma.

A big danger to parents is that a lawsuit stemming from this disturbing activity is not likely to be covered by homeowner’s insurance and could leave you personally responsible to pay the high cost of legal defense and any damages that are awarded to the victim.  The amounts of money can be staggering.

The homeowner’s policy provides personal liability coverage for “bodily injury or property damage” and “bodily injury” is defined within the policy to mean “bodily harm, sickness or disease”.  The definition does not include things like emotional distress, anxiety and mental injury which are often the result of cyberbullying. 

“Personal Injury” coverage can be added to most homeowner policies for a very small additional premium and it respond to things like mental anguish, libel, slander and false arrest.  So, you may say; “If I spend a few extra premium dollars to add Personal Injury coverage I will be protected if my child gets a little out of line online, right?”  WRONG!!

Being the insurance nerd that I am, this is where a lump began to form in my throat and the article really caught my attention.  In October 2000, the Insurance Services Office (ISO) released an update to the homeowner’s policy form HO-00-03, more commonly referred to as the HO-3.  This form is used by many insurance companies as the basis of the homeowner’s policies they offer.  The HO-3 contains an exclusion for loss resulting from “Expected or Intended Injury” to another person…and rightfully so.  But, one little word in this exclusion had changed.  The word “the” was replaced with the word “an”.  At first glance, one would think this is no big deal.  However, this was not a mere correction in grammar or an attempt to save ink by shortening a word.  The consequence of this seemingly minor tweak changes everything when it comes to a loss resulting from a child’s cyberbullying activities. 

Let’s say, for example, that your 15-year old teen engages in cyberbullying activities.  The victim then sues you (the parents of the cyberbullying teen) for the grievous mental anguish and embarrassment that resulted. With that, keep in mind that the homeowner policy defines the “insured” as the person named on the declarations page of the policy, a spouse who is a resident of the home, a relative that is a resident of the home, and others under the age of 21 who are under your care and a resident in your home. 

In earlier versions of the homeowner’s policy, the use of the word “the” in the “Expected or Intended Injury” exclusion provided for a separation of insureds.  While the word “the” was in the exclusion, the parents, who are legally responsible for the acts of their minor children, would have coverage under their homeowner’s policy because they were not “the” insured that performed the intentional act that caused the injury.

Now, dial forward to the newer homeowner policy form that uses the word “an”.  The definition section of the newer policy now states: “…when the word an immediately precedes the word "insured", the words an "insured" together mean one or more "insureds".”  Ouch!  There is no longer a separation of insureds.  All household residents are now treated collectively as one insured and, since the child is “an” insured and the parents are “an” insured, and the act was created by “an” insured, there is no longer any coverage!

As cyberbullying and other Internet-related harassment or intimidation activities become more prevalent, insurers will likely continue to seek ways avoid getting involved with them.  In fact, even now, some homeowner’s policies in the northeastern states are beginning to include an exclusion called an “Electronic Aggression Exclusion”. 

While this article focuses on the act of cyberbullying, the “Expected and Intended Injury” exclusion in the homeowner’s policy extends far beyond electronic communication by encompassing expected or intended injury resulting from any act or omission.  Some insurance companies have even changed the word “an” to “any” which further clarifies the serious intent of this exclusion.  For example, the language used in one policy we reviewed says; “… does not apply to bodily injury or property damage which is expected or intended by the “insured” or which is the foreseeable result of an act or omission intended by any “insured”…”.  Another company’s policy clearly targets the acts of children in the household by saying there is no coverage for; “Bodily injury or property damage caused by the willful, malicious, or intentional act of a minor for which an insured person is statutorily liable.”

The best defense against any type of risk is to avoid it completely - know what your children are doing online – what they’re saying on social media sites, what they’re tweeting about and who they’re talking about.  For risks you can't avoid, call Insurance Planning Service at 800-220-5582 or contact us using our easy online CONTACT form.   We can help you with an insurance program that will be there for those unfortunate times when it is needed the most.

Article by: Richard D Bernard

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