Insurers are likely to deny coverage for this disturbing activity
By Donald S. Malecki, CPCU
In a growing number of instances, some youths are finding that their involvement in cyberbullying is getting them in deep trouble; in other words, when a child, pre-teen or teen harasses, threatens and/or torments other youths through use of the Internet or other electronic devices.
The end result of a court order in a cyberbullying case can be the loss of life's savings, home, autos, and personal possessions. Sadly, many parents first learn about the actions of their children from a legal proceeding. The following is an excerpt from a father's testimony about his son's actions in the case of D.C., a Minor, etc., et al. v. R.R., a Minor, etc., et al. 182 Cal. App. 4th 1190 (2010):
". . . [R.R.'s] computer is located in his bedroom. I do not have a password to any of his accounts . . . there is no way for me to know the content of any email sent or received by [my] son unless he happens to tell me. Prior to my son's communication which is the subject of this lawsuit, I was not aware that he sent any messages with accusatory, threatening, or inappropriate content. I never saw any such messages; . . . Contrary to the allegations in the complaint, I never allowed or permitted my son to engage in the conduct alleged. I had no idea that he sent such messages; never suspected he sent such messages; and because I did not have his password[,] I did not have any ability to read his emails. . . . "
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.
It is not until the victims, who sustain emotional distress and/or mental injury, complain about it to their parents and school officials (to the extent that a school is involved), that action often is taken. What is especially unfortunate, however, is when the victims take their own lives instead of seeking assistance to put a stop to this kind of conduct.
Peering into the dark side
Whether or not some form of personal insurance, such as a homeowners policy, will come to the aid of parents who are sued for the impact of alleged cyberbullying is a difficult question. Considering that not all homeowners policies are the same and there are so many variables to consider, an outright yes or no answer is not possible.
One of these variables, for example, is that the allegations commonly involve emotional distress, anxiety, sleeplessness, insecurity, fear and mental injury. In the majority of states, however, none of those allegations is considered to be bodily injury, sickness or disease—terms not defined in insurance policies.
In custom and practice, the term "bodily injury" involves physical bodily harm, such as a broken bone or scratch. Without physical bodily harm, it is usually not necessary to go any further in determining the application of coverage. This is not to say that physical bodily harm is an absolute criterion. Some states hold that bodily injury also involves emotional distress even in the absence of physical bodily harm.
Let's assume that emotional distress is considered bodily injury, sickness or disease. The next obstacle would be to determine if the allegation can be considered an occurrence, i.e., an accident that results in bodily injury.
At one time, the homeowners policy treated insureds separately. In other words, the policy provisions applied separately to each insured against whom claim is made or suit is brought. So if the policy did not apply to the insured who was to intentionally cause injury, other insureds, such as the parents, would still be covered.
The situation is a little different today because some of the policy exclusions are worded so that no coverage applies to any insureds even when the bodily injury is found to have been expected or intended by one insured. Refer, for example, to the ISO homeowners Policy HO 00 03 10 00.
The expected or intended injury exclusion precludes coverage for "'bodily injury' . . . which is expected or intended by an insured . . . .even if the resulting 'bodily injury'. . . a. Is of a different kind, quality or degree than initially expected or intended; or b. Is sustained by a different person, entity, real or personal property, than initially expected or intended . . . ."
The crucial word in the above exclusion is "an." Until recently, the word "the" applied in place of "an." The significance of the word "the" is that if the exclusion applies to one insured, coverage remains for other innocent insureds. With the substitution of the word "an," however, the exclusion applies to all insureds, even if one insured were to have caused the injury.
Another question is: What about personal injury liability—any coverage there? It is probably safe to say that many homeowners policies today do not include personal injury liability coverage. What most insureds have to do is to depend on a personal umbrella policy over a typical deductible of $250 to obtain that coverage.
Whether a homeowners policy includes personal injury liability coverage or the coverage has to be added by endorsement, the provisions are likely to be the same as with bodily injury. In fact, the provisions are likely to be the same even with personal umbrella policies. In other words, coverage under a personal umbrella policy is not likely to be broader than what applies on a primary basis.
The fact that personal injury coverage does not require bodily injury—i.e., physical bodily harm—may be encouraging to some insureds. Also important is the fact that coverage generally applies to oral or written publication—in any manner, which includes electronically—of material that slanders or libels a person or violates a person's right of privacy.
The problem will be with the exclusions, and there are likely to be more than one of them. It is not unusual, for example, to see an exclusion for "personal injury," a defined term, that is caused by or at the direction of an insured with the knowledge that the act would violate the rights of another.
Another exclusion is "personal injury" that arises out of oral or written publication of material, if done by or at the direction of an insured with knowledge of its falsity.
The fact that a youngster involved in cyberbullying may not understand the significance of any one of the above exclusions, along with others, is no excuse for an otherwise applicable exclusion. The reason is that when the exclusion applies to "an" insured, it is likely to have an adverse impact on all insureds, such as his or her entire family.
Since cyberbullying is a term reserved for youngsters up to age 18, a term denoting the actions of adults is cyberstalking. Despite the difference in use of terms, the impact including lack of insurance can be the same. One recent case involving cyberstalking that is worth mentioning is Lewis A. Heacker v. Safeco Insurance Company, et al., No. 11-1489 (U.S. Ct. App. 8th Cir. 2012).
This was an action by the victim who obtained a judgment against the offender and her insurance companies in the amount of $7.5 million for certain offenses involving electronic devices.
The offender in this case hacked into the victim's voice mail and Facebook, by sending disparaging letters and e-mails about the victim, along with anonymous phone calls and texts to harass or defame him. The victim then amended his complaint to include a claim that the offender negligently failed to supervise his children who may have participated in this harassment.
To make a long story short, the victim failed in his efforts to collect from the offender, who apparently had nothing to lose, because the allegation of emotional distress was not considered to be "bodily injury," under the personal insurance policies of the offender.
Further insurers' action necessary?
With the growing prevalence of electronic means to infringe on the rights of others, it is somewhat surprising that insurers have not as yet introduced an exclusion that more closely fits the exposure, rather than the general exclusion of expected or intended injury.
This is not to say that personal lines policies are inadequate when it comes to denying coverage for cyberbullying, cyberstalking, or any one of the other electronic modus operandi that can cause harm.
The exclusions used by most insurers are general rather than specific to the exposure. This may be the reason the Mutual Service Office (MSO) is introducing what it describes as an "Electronic Aggression Exclusion" to its personal lines program. In existence since 1944, MSO serves both mutual and stock insurers in the northeastern United States, with the aim to provide small to mid-sized insurers with an easier, more profitable way to underwrite risks. In a recent release, MSO states that its new endorsement comes as result of the "growing prevalence of cyberbullying and other Internet-related harassment or intimidation activities."
MSO also states that "electronic aggression" is a term coined by the Centers for Disease Control to encompass all kinds of violence done electronically. According to MSO, consistency of policy language makes claims handling easier.
In light of these kinds of developments, it becomes incumbent upon parents to exercise a lot of caution when it comes to the use of electronic devices by their children. These adverse acts of children are the easiest way for parents to lose their entire assets, not to speak of the time, expense and aggravation of resolving these kinds of issues. The reason is that insurance is unlikely to be of much benefit.
To the extent emotional distress, anxiety, and mental injury are not considered bodily injury, insureds caught up in allegations of cyberbullying are not likely to have protection for legal costs under their personal insurance programs.
Even when emotional distress, anxiety and mental injury are considered to be bodily injury, insureds will have to contend with whether the allegations are considered to be an occurrence, i.e., an accident, along with the expected or intended injury exclusion.
Since both standard ISO and many independently filed homeowners policies have eliminated the separation of insureds concept insofar as expected or intended injuries are concerned, coverage becomes unavailable to all insureds.
To the extent homeowners and other forms include personal injury liability coverage, insureds may not have to contend with the meaning of an occurrence, but, instead, with exclusions similar to those applying to bodily injury.
Policies issued to individuals and families containing more specific exclusions, such as the Electronic Aggression exclusion offered by the Mutual Service Organization may short-cut the maneuvers customarily required to preclude coverage for any kind of injury or damage having to do with electronics.
There is only one side to the subject of cyberbullying—the dark side. This is where insureds are likely to learn the true meaning of risk management, particularly the technique of retention.
Donald S. Malecki, CPCU, has spent more than 50 years in the insurance and risk management consulting business. During his career he was a supervising casualty underwriter for a large Eastern insurer, as well as a broker. He currently is a principal of Malecki Deimling Nielander & Associates LLC, an insurance, risk, and management consulting business headquartered in Erlanger, Kentucky.