Insurance professionals believe their clients’ risk exposure will increase in the next year, because more small and medium size companies are incorporating social media in their marketing strategy. Specialty-insurer, Torus conducted a survey of 105 insurance professionals during the November 7-9 Professional Liability Underwriting Society Conference. Fifty eight percent expect to see an increase in the need for media liability policies to reduce social media risk. Of this number, sixteen percent believe the need for these policies will increase significantly. Thirty-six percent think there won’t be an increase in the number of requests and six percent believe requests will decrease.
Thirty three percent said their primary concern is data leakage. Christopher Cooper, assistant vice president of Torus, feels the publishing of company secrets or certain company information may present problems with Securities and Exchange Commission regulations.
Twenty-seven percent are concerned with the lack of control over potentially damaging content posted by employees. These types of postings can damage a company’s brand. For example, an employee inadvertently posting political commentary on the company’s social media account instead of the employee’s personal account.
Other areas of concern are personal injury exposure, copyright and trademark infringement, and the lack of certain risk management policies. Using celebrity images without the individual’s permission is another concern. However, it wasn’t part of the survey.
According to Cooper, small and medium size companies have the same exposures as large companies. The difference is that small and medium size companies don’t have the resources to train employees, monitor postings, and have legal advice readily available to them.
Cooper says that litigation over inappropriate postings is increasing. He cited an example from last year when a fashion designer was offended by a posting aimed at her by singer, Courtney Love. The designer sued Love costing Love approximately $500,000 for her defense. He said, “It’s the off-the-cuff comments and knee-jerk reactions that can cause damage.”
Cooper said that mistakes do happen even with training by legal and marketing teams. Access to a company’s Twitter and Facebook accounts need to be limited to only a few employees. Create formal rules about postings and protocols to take down postings quickly. He also recommends hiring an attorney to be on stand-by for social-media issues. Unfortunately, small and medium size companies don’t have the resources to put these programs in place.
Almost every business today is a publisher, which opens the exposures associated with publisher liability. Most companies don’t realize the severity of the exposures they can face.