Social media business liability insurance in the cards?
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If your boss doesn't like people he, shouldn't be running your social media, says Insurance.co.za. The uptake of social media by businesses is opening them up to a whole range of business insurance liability risks, as "more interaction with consumers means more liability."
"Social media is where the consumer is at, but very few businesses have catered for the increased risk in liability that this poses. Freer communication means businesses no longer have as much control over the message they want to convey, and sometimes this message can be construed as defamatory, breach of employee privacy or in contravention to advertising standards," says Insurance.co.za.
Businesses thus face more risk of being sued by consumers and employees alike, making business liability insurance and media liability insurance all the more important.
Businesses are unaware of the legal ramifications of their efforts to connect with consumers. Before your company decides to change the face of social media with its very own Facebook page or Twitter account, it may be a good idea to draft a style guide or document that governs not only what content gets posted, but who reviews it and how employees can interact with it. "Nothing says desperate quite like an employee praising the company they work for. The 'If you don't say so yourself, no one will' principle doesn't work on social media."
After Honda USA, for example, posted pics of the new Accord Crosstour on their FB page, consumers were horrified at it's 'wagon-like' appearance. To save face, an employee posted a positive comment which later backfired when a fan went onto LinkedIn to discover that the positive comment came from Honda's Manager of Product Planning. Said fan posted the link to the employee's public LinkedIn profile on the page.
The internet never forgets. That type of publicity is difficult to recover from. Even though a major 74% of respondents in a 2009 Deloitte Ethics survey indicated that they believe social networks can damage a company's reputation, only 17% had a policy governing employees' use of social networks.
"Perhaps a good idea for insurers to begin contemplating, social media business liability insurance doesn't yet exist. A good combination of general business liability insurance and media liability insurance, though, may cover you for social media blunders."
Personal liability insurance and social media
Individuals, too, are not immune to the problem of reckless social networking. Renowned mommy blogger, Dooce, shot to fame after she was fired for writing about people in her workplace online. Learning from her mistake, 30% of the respondents in Chubb's survey cleaned up their statuses and tweets before going on a job interview.
"Employers customarily view job applicants' social media profiles to see what kind of person they are. Even posting comments on other blogs and sites can be traced back to you." The Media Bloggers Association in the US now offers liability insurance for bloggers and social media users.
Their policy, BlogInsure, covers policyholders from defamation, invasion of privacy, copyright infringement and similar allegations. The policy comes with an online course in media law, giving social networkers the same resources as traditional media organizations.
While insurers are still contemplating taking up the social media ranks to target consumers themselves, perhaps a better idea is to take up the challenge to cover businesses and professionals against the risks associated with social networking.
Increased risk
In a survey conducted by Chubb Group of Insurance Companies USA last year, 2% of blog and social media users let their lawyers review comments before posting them. Further, 98% of respondents stated that they didn't ask for permission before reposting or publishing copyrighted material."The risks of social media are greater than that of general media liability. Less thought goes into a status, comment or blog post than goes into a press release or advert."
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