Property & Casualty Insurance Exam (National Portion)Casualty InsuranceMedium
A client's homeowner's policy includes personal liability coverage. The insured is sued for libel after posting negative comments about a neighbor online. Which of the following statements is true regarding coverage for this claim?
- AHomeowner's policies typically exclude all forms of libel or slander.
- BThe policy would cover the costs only if the comments were made in person, not online.
- CThis type of claim falls under property damage, not personal liability.
- DThe claim would likely be covered under the Personal Injury liability section of the policy.
Show answer & explanationAnswer & explanation
Correct answer: D. The claim would likely be covered under the Personal Injury liability section of the policy.
Many homeowner's policies include Personal Injury coverage, either as a standard feature or an endorsement, which provides coverage for specific offenses such as libel, slander, false arrest, and invasion of privacy. Libel (written defamation) would typically fall under this coverage.
Why the other options are wrong
- A. While some policies may have limitations, many homeowner's policies explicitly cover libel under Personal Injury, often by endorsement.
- B. The medium (online vs. in-person) generally does not determine coverage for libel or slander; it's the nature of the defamatory statement.
- C. Libel is a non-physical injury and falls under Personal Injury or liability, not property damage.
Personal Injury (Homeowner's Liability)
Coverage within a homeowner's policy (often by endorsement) that protects the insured against claims arising from specific non-bodily injury offenses such as libel, slander, false arrest, invasion of privacy, and wrongful eviction.
- Differs from bodily injury and property damage.
- Covers specific offenses like libel and slander.
- Often added as an endorsement.
Memory trick: Beyond physical harm, there's personal injury too.