Should You be Concerned about Social Media Liability?

When we think of social medial liability, most of us are thinking of ways to protect our digital identity or manage our kid’s screen time. We’re not thinking of buying business insurance. Most business owners aren’t thinking of the risks they’re taking when they use social media.

Businesses are making use of social media to stay connected with customers or developed new prospects. It’s not just conventional brick-and-mortar businesses embracing the new social media paradigm, new online businesses are popping up every day, many that are exclusively built around online or social media marketing.

As businesses and individuals increase their digital and social media tools, it becomes more important that we collectively increase our awareness of the potential social media liabilities that exist. Simply put, the more you know the better prepared you’ll be to avoid costly and inconvenient losses due to an errant Facebook post or blog comment.

What is social media liability?

When we discuss social media liability we’re referring to insurance claims or even lawsuits for libel, slander, harassment, invasion of privacy, violations of intellectual property rights, and even improper employment practices. Each of these can result in a loss when you or your business uses social media sites like Facebook or Twitter, even your company blog can create a social media liability exposure.

Some of the issues that may arise can be difficult to completely eliminate, however, the good news is that there may be insurance coverage that exists for business exposures to social media liability claims. Most business insurance policies include personal and advertising injury coverage providing some protection against libel, slander, and derogatory remarks as well as invasion of privacy.

Business insurance and social media liability

A review of the standard business insurance forms, like general liability, will reveal language that provides limited coverage for material published on the internet or to electronic communications. Moreover, coverage may exist in a business owner’s policy that provides for defense against suits involving libel and/or slander, or covering claims due to incidents of publishing or broadcasting information in any manner. So, in the standard coverage, your business may have some form of coverage for social media liability.

Who should be concerned?

For businesses with blogs or websites that write about other companies or products, slanderous posts can be an obvious concern. If you write about individuals, invasions of privacy are another concern. Also, if you allow comments on your post or channels from external users, a user’s comments may contain defamation. For example, after the dissolution of an intimate relationship – a user could leave a slanderous or defamatory comment about their former partner that leaves a business vulnerable to legal claims.

Businesses may, for example, improperly attribute the ownership of a website to a lower-level employee in order to shield the business. That employee may sue for invasion of privacy, especially if the website contains sordid or proprietary material.

Business managers may also announce firings or disclose personal information about their employees online. Additional exposures run the gamut. Claims can arise from accusing individuals of crimes, infidelity, failure to pay child support, disclosure of personal or financial information, posting of pictures or videos in compromising positions, etc.

With the fluidity of social media posting and content distribution on a website, just about every business should be concerned.

Social media liability claims get messy

As a business, the last thing you need is to incur unnecessary expenses or to lose valuable time to unproductive activities. This is why you need to understand your use of social media because social media liability claims can be complicated and expensive.

Consider this, many social media liability claims involve archived postings. In these instances, defense costs may include electronic discovery or subpoenaing information from any applicable social networking sites. Expenses could expand if a party filing a lawsuit demands information beyond a post to one particular site to include posts made on all the social networking sites where a party to the claim or lawsuit holds an account.

Depending on the nature of the claim, the insured may be faced with multiple lawsuits in multiple jurisdictions including outside the United States. Defense costs may reflect extensive jurisdictional and venue disputes that have to be handled (and paid for) even before determining if that claim is eligible for coverage.

Another issue is the problem of handling intentional (deliberate) acts. They are routinely excluded by most insurance policies. An insurance company may choose to deny either legally defending and/or responding to a lawsuit because, in its opinion, the policyholder had full knowledge that published information was false or that an act was an invasion of privacy.

What can you do?

Social media liability is not a common term so insurance policies generally refer to the traditional terms of “personal and advertising injury,” extending this traditional coverage to social media and the internet.

Common or not, Social media makes it easier to libel, slander, or invade a person’s privacy. Off-the-cuff comments that used to be made at the water cooler or in the privacy of one’s home are now published nationwide or internationally. The result? Damages sought by a claim can be more substantial because there are more people aware of the comments as compared to the traditional situation.

You must be aware of the legal potential of using social media and the claims that can result if defamatory comments are made about family members, friends, exes, etc. There is no immunity from lawsuits simply because such comments are commonly posted on sites such as Facebook or Twitter.

Consider what is at stake, especially for businesses, and consider all your coverage options. Umbrella coverage is definitely recommended as an additional source of protection. Umbrella coverage is also recommended for prolific social media users and bloggers.

The bottom line

Avoiding high-risk behavior is the simplest and most effective way to eliminate problems, it is unlikely that individuals will avoid social media or blogging altogether. A more realistic expectation may be that a person may inadvertently engage in behavior that creates a claim.

Individuals should evaluate the risk potential and realize that coverage for social media liability may become a necessary part of everyday life. If you’re uncertain about your risk, contact us or start a quote online.

Image Source: William Iven