Social Media Liability

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Our most recent blog post talked about Cyber Security and how to protect your business from a breach, but, did you know you can land yourself in hot water just by using social media?

A business with a social media presence can experience all types of exposure, good and bad. Social media provides brand awareness, increased customer service and the ability for clients and customers to offer feedback. Unfortunately, this also means that customers typically won’t spend the extra time to contact you directly, rather, resorting to posting a complaint online in the public sphere. This can be damaging to your business’ reputation, potentially leading to loss of income.

Negative feedback can be used to better understand the needs of the customer, and is hardly considered the worst-case scenario in matters of online liability. However, complaints or allegations extended from a competitor can be far more damaging and could lead to legal trouble if the infraction is deemed offensive enough. Liabilities can include anything from using an unlicensed stock image, to making unfair comparisons with a competitor. Simply posting a photo of an individual without permission can lead to the perception of privacy invasion.

Social media liability insurance is a relatively new coverage option, rising in popularity with the uptake of Facebook, Twitter, Snapchat and other social platforms by businesses. This type of coverage is similar to media liability, and is used first and foremost as a legal defence cover for those who publish and share content online, ensuring that the accused has access to adequate legal counsel. Typically reserved for publishing or media agencies, this coverage is now inclusive of all businesses who wish to add a layer of protection over their online marketing strategies.

Many small and medium sized enterprises typically conduct very little business over the internet. If they do, it’s often through the discretion of an employee posting to social media with little or no compliance training with copywriting and licensing. This should be reason enough to explore the benefits of coverage options, but with more businesses moving online to market products and services, and communicate with customers, the option to cover their assets from regulatory, legal and reputational risks is increasingly becoming an attractive one.

Traditional insurance can apply to some exposures on social media, however, most policies were written before the onset of certain technologies, resulting in coverage gaps. There has never been a more crucial time for businesses and organizations to be accountable for the content they promote. Everything on the internet lives forever, something that may seem innocuous now can pose a bigger problem in the future.

Creating a strategic guideline of review can help mitigate risks. Be sure that each comment, post or share of content is given due regard. Set the expectations of those involved in managing the online reputation of the business. This includes determining the tone of messages, and providing training to your employees to avoid copywriting and licencing liabilities. At the very least, these measures will prove to insurers that you’re taking appropriate action to mitigate exposures, making you a more likely insuree.

For more tips on how to avoid costly blunders, read our blog post on Risk Management and other insurance-related matters at paibinsurance.com/blog.