Even with reports that 1/3 of couples who marry meet online, dating sites continue to be extremely difficult and expensive to properly insure. In our litigious society dating sites are the perfect target for unfounded lawsuits – which makes insuring those costs extremely expensive. The $1.5B lawsuit from a Florida model against Match.com over the use of her picture in fake profiles caught headlines and likely brought defense costs that soared well into the six figures. However, lawsuits like the $10M case filed (again against Match.com) from a woman who was stabbed by a man she met on the site are the most expensive.
Risk Management for dating sites has become a double edged sword. Efforts to screen clients and offer safety assurances to members make it tougher to defend lawsuits. The $10M Match.com stabbing case was defended under the Communications Decency Act, which protects publishers from liability for content published by third parties. If dating websites advertise or agree to perform robust background checks, attorneys will have a much easier time arguing that they are responsible for the safety of the ensuing date. The largest dating sites are investing heavily in protecting customers but are very hesitant to advertise the protections they are putting in place.
Dating websites should address liability and insurance issues as soon as possible and construct a proactive plan to manage risk while supporting growth. The prices charged to adequately insure a site are unaffordable for all but the largest providers. However, this shouldn’t stop those providing these services to start exploring options and managing risks within the constrains of the current insurance market. Coverage is available for operations of all sizes. Private equity firms perform extensive due diligence, having a formal risk management and insurance plan in place helps startups obtain the higher valuation possible. Contact an expert tech insurance broker today to start the process.