Litigation over what happens in social media and blogs is growing at alarming rates.  It’s scary enough to hear that you’re being sued, but the scariest term a lawyer can use in my presence is the phrase “personally liable.”   That means that I could wind up paying damages because of what someone else did.

As a writer writing my personal blog, a grandmother writing a review on Yelp, and an avid Facebook and Twitter user, I don’t mind being responsible for what I say or do online.  I know the rules, and I work hard to abide by them.

Part of knowing the rules is understanding that it’s possible that a court could hold you personally liable if a plaintiff wins a court judgment for something someone else does on behalf of a company I own or participate in as a partner, an informal group (for profit or not-for-profit) I belong to, or a company or non-profit of which I am a Director. I can also be held personally liable for things a minor child does online – from streaming movies illegally on BitTorrent to cyberbullying on Facebook to downloading songs from Pirate Bay.

What that means is that you really can lose your shirt – and your house, life savings, car, and the diamond ring you inherited from your grandmother – for something you didn’t do.  In fact, depending on where you live, you can lose just about anything the plaintiff thinks can be sold to pay the judgment if you are unable to pay it in cash.

Don’t have a bank account or other asset?  If you have a job, your wages can be garnished to pay the judgment.  (That means that part of every paycheck gets deducted and paid directly to the plaintiff until the judgment is paid in full — even if it takes years, or the amount is so huge that it can never be paid completely.) 

Don’t have a bank account, assets that can be seized, or a job?  Then you may be “judgment proof”, and the plaintiff can wind up with nothing except a lien against your estate, in case you ever get a job, win the lottery (or more than a few dollars in a casino), or acquire assets (such as life insurance, a settlement in a lawsuit you might win, or other financial gain). 

People who are actually judgment proof rarely get sued, for the simple reason that lawyers won’t take cases on a contingent fee basis if they aren’t pretty sure that the defendant can pay damages if they win.  But chances are that you aren’t nearly as judgment proof as you think you are – nearly all of us have assets we can lose in a lawsuit.  (Reading this blog post on a computer you own? You’re probably not judgment proof!)

This post isn’t about how to avoid being sued – it’s about how to arrange things so that even if you are sued and lose, damages don’t come out of your pocket.  All of these suggestions have to be taken before you get sued – once you’ve been sued, none of them will work.

The most obvious way to protect your personal assets is to shield your personal assets behind what’s called a “corporate veil” — that is to become a business.  If you form a limited liability company (LLC), a corporation, or a non-profit organization, you are generally not personally liable for the actions of others participating in the business – but you are still personally liable for your own actions.

The second major way to protect yourself is to recognize when you’re putting yourself at risk.

My friend Therese got together with some friends to raise money to rebuild a local playground after a tornado.  They didn’t take the time to register their group as a 501(c)(3) not-for-profit organization because they only intended to work together until they raised the cash they needed – about 90 days. 

Unfortunately, my friend discovered that she was a personally liable member of an informal group when one of the other volunteers used the group’s website, blog, and social media program to accuse a local contractor of “stealing from children” by performing “shoddy work that endangered kids” during the rebuilding. 

As it happened, she had the “deepest pockets” of any of the participants because she had always lived simply, saved for her retirement, and had no children or debt.  So she wound up paying nearly all of the $30,000 in damages out of her own pocket – even though she was half a continent away on a business trip when the accusations were made by someone else.

I have learned the hard way to just say no when I’m asked to volunteer, or serve on the board of directors for an under-funded start-up without insurance or at least indemnification from liability.

Personal liability is an unpleasant prospect in any case – but the larger your business or nonprofit group is, the more intolerable it becomes.  Remember, if you work alone – creating and publishing your own content – you can forget about personal liability because no one else is publishing material and we’re all liable for our own content and actions in any event.

But as soon as your online activity grows to the point where multiple people are publishing content online (whether they’re paid employees, volunteers, or friends and family), then personal liability for THEIR actions becomes a more significant risk. 
Ask a lawyer if you need to incorporate or create a Limited Liability Company as your blog grows.  

Investigate Errors & Omissions insurance to see if it’s affordable for your online activities.  (Warning:  E&O insurance may be hard to get for some kinds of blogs and social media activities, and it’s seldom inexpensive. But if you can get it, it’s worth it.)

Most importantly, learn the legal deflation for each of these terms – and screen every single post for them: 

• Defamation 
• Copyright or trademark infringement 
  Invasion of privacy 
• Violation of trade secret laws or regulations like HIPAA  or FERPA
• Tortious interference or contract interference

Guest posts and shared content provided by people in your social network, LinkedIn group, or professional organization are a great way to add free or very low cost information to your blogs.   Set some guidelines before you start recruiting or publishing guest blogs, though. 

What goes into the policy? Liability, of course.  Make it clear that the writer is assuming responsibility (and liability) for what he or she writes, and that by submitting the post they are certifying that the content belongs to them and does not infringe on any intellectual property, copyright, or trade secret belonging to anyone else.  You’ll also want to set length, content, links, images, quality, and formatting guidelines so that if you have to reject a post for any reason, there are clear ways to do so. 

It is possible to have your say in the online world without losing your shirt.  But it’s also possible to lose it.  The difference is in planning ahead.