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Vol. 13 - Issue 3
August 12, 2024
Insurer Puts ROR On TikTok: Was That Valid Delivery?
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The insurance industry has always gotten high marks for identifying emerging risks and offering ways to mitigate them through newly-developed policies. So it comes as no surprise that insurers have developed policies to insure the risks of social media. These policies are designed for heavy users – those with hundreds of thousands to millions of followers. They are promoted to protect against such mishaps as invasion of privacy, defamation and injury and damage if an insured's post causes someone to act in a way that leads to injury to themselves or someone else.
Fourteen-year-old Sammy Hopkinson is a TikTok star, posting to her 2 million-plus followers videos of life in a very small rural Iowa town – often focusing on the lack of things to do, places to go and stuff to buy.
In August 2022, Sammy posted a video discussing her discovery that there are countless marshmallow feats in the Guinness Book of World Records: Most marshmallows eaten in one minute (25); Most marshmallows eaten in one minute without hands (20); Most marshmallows caught by mouth in one minute (58) and countless more.
Intrigued by this, Sammy created a TikTok of herself making a 3'x 3' s'more. Using the huge stovetop in her parents' farmhouse kitchen and putting together several cookie sheets, she combined 6 boxes of graham crackers, 60 chocolate bars and 7 bags of marshmallows to create a 9 square-foot s'more.
The video went viral and had 9.5 million views.Not surprisingly, other teens did the same, posting their own videos of gargantuan s'mores. One such mega-s'more was created by 12-year-old Alexandra Worthington of Chicago. She created a TikTok, in her parents' living room, showing off her 12 square-foot s'more. While she was doing so it slid off its cardboard base -- landing on the coffee table. But this was no Ikea item. It was a Louis XIV Ormolu-Mounted Ebony Marquetry table from the late 1600s, valued at $3 million. The magnificent French antique was now covered in melted chocolate and marshmallows and a total loss. |
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Alexandra's father, Earl Worthington, sued Sammy Hopkinson in Cook County, Illinois for the damage, alleging that she had encouraged her followers, including his daughter Alex, to emulate her moronic stunt.
Thankfully for Sammy, and perhaps Earl, Sammy's parents, a few months earlier, seeing how wide-spread Sammy's social media presence had become, purchased a policy from Social Media P&C Ins. Co. with a $2 million limit. The insurer undertook Sammy's defense.
Worthington secured a $2.6 million judgment. But it was ultimately determined that no coverage was owed as an exclusion for "encouraging food stunts" applied. But Sammy argued that she had been defended without a reservation of rights; so Social Media P&C Ins. Co. had waived the ability to assert the exclusion. Sammy argued that she had never been provided with a reservation of rights letter.
Social Media P&C agreed that it had never sent a ROR letter, per se – but maintained that it had provided a ROR by video on its TikTok account. The adjuster had made a two-minute video, reading the ROR to Sammy, and clearly discussing the potential applicability of the "encouraging food stunts" exclusion. In the background is a cat riding on top of a Roomba. Social Media P&C maintained that it was a condition of coverage that insureds follow it on TikTok. Therefore, the insurer argued that Sammy had been provided with adequate notice of the ROR.
Worthington took an assignment of policy rights from Hopkinson and recently filed suit against Social Media P&C for coverage under the policy, arguing that the insurer had failed to properly deliver its reservation of rights. Stay tuned. |
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That’s my time. I’m Randy Spencer.
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