Sex, Videos, and Insurance: How Gawker Could Have Avoided Financial Responsibility for the $140 Million Hulk Hogan Sex Tape Verdict

Abstract

On March 18, 2016, and March 22, 2016, a jury awarded Terry Bollea (a.k.a Hulk Hogan) a total of $140 million in compensatory and punitive damages against Gawker Media for posting less than two minutes of a video of Hulk Hogan having sex with his best friend’s wife. The award was based upon a finding that Gawker intentionally had invaded Hulk Hogan’s privacy by posting the video online. The case has been receiving extensive media coverage because it is a tawdry tale involving a celebrity, betrayal, adultery, sex, and the First Amendment. The case likely will be remembered by most people for: 1) the shockingly high verdict amount of $140 million awarded to a celebrity adulterer who was filmed having sex with his best friend’s wife, and 2) the battle between what constitutes the outer boundaries of what is considered “news” under the First Amendment and a celebrity’s right to privacy. The case also should be remembered, however, for the lesson it provides business owners: instead of facing a damage award that forced Gawker to file for bankruptcy and to now seek relief on appeal, Gawker actually could have avoided paying any portion of the damage award. How could Gawker have obtained that result? Insurance. This article debunks the conventional wisdom that insurance does not cover intentional torts such as invasion of privacy or punitive damage awards and that it is against public policy to allow insurance to cover intentional torts and punitive damages. Consequently, if Gawker had purchased appropriate insurance, then it may have been able to avoid paying any portion of the ultimate damage award.

Keywords: Gawker, Hulk Hogan, First Amendment, Right to Privacy, Terry Bollea, Insurance, Media Liability, Public Policy, Intentional Torts, Invasion Privacy, Right Privacy, Punitive Damages, CGL, Commercial General Liability, Bankruptcy