What is Trade Libel and Why Should I Care?

In case you don’t know —

Trade libel is defined as oral or written publication, in any manner, that slanders, libels, or disparages another company’s goods, products, or services. [ See dictionary for a more formal definition ]

We have been thinking about this topic a lot recently, because in the modern age of digital world, businesses like Gold Ira need to promote their goods and services via a variety of advertising and marketing channels, including social media, websites, blog commenting, forum posts and more. Yet, admittedly, we have been hesitant to do soon because while these channels may provide a quick and easy way to widen our customer base, we quickly recognized it would be difficult for our management team to control and leaving untrained junior staff with the responsibility could greatly increase our risk of being accused of trade libel.

To make matter worst, early in July of this year, Eric Hillner, Underwriting Strategy Manager of General Liability at Liberty Mutual, [one of our insurance business partners] ,  wrote an article titled “Trade Libel: What we need to know.” in which he stresses the impact a trade libel case can have on a company. “Litigation arising from use of the Internet is becoming more frequent. Such cases can be quite expensive to defend. Additionally, even if the claim is ultimately dropped for lack of proof, just being accused can seriously tarnish a company’s reputation,” he says.

This article and challenge inspired us to dig deeper and practice Risk Management. As you can tell, we recently updated our website and we are starting to play with digital media all with certain safeguards in place.

The Increased Exposures of Trade Libel

Digital media is not the only threat, in fact the words spoken in digital and TV advertisements, presentations, conferences/public speaking, and broadcast interviews can all increased exposure to trade libel. Here are some examples of where and how trade libel offenses could take place:

• An advertisement, in print or online, that states without solid factual evidence that another’s service is of lesser quality than its own.

• A sales presentation given by an overzealous sales representative who makes false remarks about a competitor’s product in an effort to sell his or her own

• A social media post that calls attention to the supposed flaws in a competitor’s product without a proven methodology for the comparison

How to Protected Your Company From Trade Libel

It is important to remember that there is no commercial insurance policy or surety bond design to protect your company from a trade libel lawsuit. However, education for all stakeholder is critical to reducing exposure.

“The first step to lessen your trade libel risk is creating awareness of the small exposures that are commonly overlooked, but that can potentially lead to huge lawsuits.” Hillner adds, “Whether your company is working with an employee, an intern, or even a consultant, everyone tied to an organization should know the basics otrade libel.”

Companies can take the following measures to help educate employees and minimize their risk of trade libel.

(1) Develop a policy:

Your policy should clearly state that your organization does not authorize or endorse the release of disparaging information about competitors in any form (written, verbal, image, or video) and via any channel. Anyone violating this policy, including full- or part-time employees, interns, or contractors, is subject to disciplinary action. Here’s a few articles to help guide this policy writing journey; (1) If Social Media is a tactics, why do I need a Social Media Policy? (2) Product Disparagement and the duty to defend, (3) How to create a Public Relations Plan – For Dummies.

(2) Designate a company spokesperson:

Sort of like an in-house “Flo” , except this person should be experienced in trade libel issues and receive frequent coaching by legal counsel on trade libel concerns. In fact, he or she should be the only person authorized to speak to the press. Here’s some guidance from Entreprenuer Magazine and Chegg – What does a company spokesperson do?

(3) Define a review process:

A clear review process will ensure that all external communications are evaluated for trade libel vulnerabilities by legal counsel. This in-house counsel guide by Whitney Gibson, Attorney with Vorys will show you what the lawyer on the other side is looking for, so build your policy to protect from these things.

(4) Analyze communications:

Review ways in which your company communicates with the public, customers, and competitors. Search the Internet for official and unofficial channels of communication. We made sure that the firm we hired researched certain keywords and phrases, as well as, set-up Google Alerts for us to be aware of any mention of our name.

(5) Have clear rules on company sites or blogs:

With help from legal counsel, write terms and conditions of use that permit you to approve any public submission. Have a gatekeeper who is responsible for reviewing posts and preventing those that belittle competitors. Better yet, focus on our strong point and let your customer reviews speak for themselves. 

(6) Conduct training: Train all employees, contractors, and vendors in trade libel. For those who have external communication responsibilities, consider using refresher courses and/or tests to ensure that the policy is understood. 

Trade libel cases are a serious threat to companies of all sizes for both financial reasons and those impacting your company’s reputation.

In conclusion, think twice before referencing any competitor information, and work closely with your marketing and legal departments to help minimize your risk of Trade Libel. And, remember if you commit Trade Libel get a good lawyer, because your insurance will not cover you, however, if you need commercial insurance and a surety bond Mahar Insurance is here to help.

For more info please visit: seanparklaw.com.