Defamation Law Suits: What Are They And How Can They Affect Your Business?

August 30, 2021

There is no statutory definition of defamation. However, it can often be an untrue statement. A statement that is spoken or written regarding a person or place. If published, the statement is deemed harmful or likely to harm the reputation of an individual or company.

If the statement is published online, where internet traffic can lead to thousands of people reading the information, it could have severe consequences for the business. Those reading the claims may avoid the business altogether, causing the company to miss out on potential clients and sales. Aside from published statements, spoken details are often only spread through word of mouth. However, in a small community, this can lead to severe consequences for the owner.

If the statement made against a company causes harm or is likely to cause serious harm, such as serious financial loss, an individual or company can sue in defamation. 

Making a statement that questions or insinuates that a business or individual is doing something dishonest, can cause the community the company operates within to rise against it. These allegations could cause customers to leave and not return. This is especially damaging for smaller businesses that rely heavily on some of their repeat customers. Additionally, if an employee were to doubt the company based on the claims they heard, they could decide to leave the business. The effect this will have is when trying to hire new workers, a company may find it difficult to fulfill vacancies.

In the event of a defamation lawsuit, it can impact a business in multiple ways. If you want to know more, then these are just a few ways in which a defamation lawsuit can affect your business and how it runs.

Know The Difference

Whilst they might seem similar, opinion and defamation are two separate entities. When dealing with claims of defamation, it is vital to be able to distinguish between what is defamation and what is just an opinion. If an opinion should be taken into consideration as an accusation, and be found untrue, this will still defame the person in question.

It Can Be Costly

If an employee of your business posts a slanderous comment about a client of yours online, the client in question might sue your company. A lawsuit will not only be time-consuming, but it will also be costly to the business.

It is reasons such as this that show the importance of general liability insurance. Selecting the right general liability insurance will help you in the event of a lawsuit. It will protect your business from the unexpected costs that can occur, especially ones that could put the company in an unfortunate financial situation. Whilst general liability insurance can seem like a big investment, when it is needed, it will prove to be a worthwhile investment.

Avoiding Defamation Law Suits

Knowing what a defamation lawsuit is and how it can seriously impact your business, you want to know the ways to avoid a defamation claim. The main one, albeit obvious, is to not create false claims about competitors, clients or anyone else. Additionally, even if you know something is true, avoid saying it, especially if it is likely to offend. Another way is to always check the facts and the sources when creating content.

Following any of these steps, whether it is avoiding claims or investing in insurance, will help in protecting your business from a defamation claim. For your business, it is important to avoid any unnecessary costs that occur from negligence in comments made about others.

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