Coordinate Coverages to Manage Social Media Exposures
Insurance Experts' Forum, July 29, 2014
I don’t think anyone would be surprised if I say that many companies have turned to social media to help drive their business success. The simple combination of content, user communities and web 2.0 technologies is transforming the way we do business and how we engage with customers and suppliers.
Social media helps maintain customer relationships, market products and services, recruit talent and even — to varying degrees — support internal communications. However, many companies have not considered all the liability exposures they may face. And how can they? Considering the pace of change and the rapid adoption of digital media; claims are being filed today for alleged incidents that many couldn't have imagined just a year ago. Nor should we forget that online laws for advertising and communications are still evolving.
The best way to start identifying your risk is to think about social media risks by functionality. We group social media into four categories: social networks (Facebook, LinkedIn, Google+), content sharing (YouTube, Instagram, Skype), rating (Yelp) and social bookmarking (Pinterest, Instagram).
By grouping social media into these functional categories, you begin to get a visual picture of what exposure you face where, as shown below. These exposures may be well beyond the boundaries of what most companies initially anticipate and insurance carriers are willing to insure.
The fact is that even if you think you are doing everything right, many social media capabilities have not been fully tested and new exposures arise all the time.For example, many social media companies and platforms have a mechanism for the public to comment and respond to posts or stories. What if one of the ratings negatively impacts a neighborhood business? What if a post disparages another individual? It would be difficult for companies to control everything that the general public says, but they should have a clearly stated, communicated and adhered to policy regarding review and removal of offensive content.
Traditional general liability policies that typically cover bodily injury, property damage, personal injury and advertising injury often have exclusions for social media, electronic billboards or blogs. OR, these policies exclude professional services. You many need to find a media policy to cover content injury that can pick up mental anguish exposure. And some coverage you need may not even be available in the market yet.
The bottom line is that no one policy will cover all the exposures in the social media realm. You need to dig deeply into the coverages, look at exclusionary language and explore how the endorsements add or remove coverage across a number of policies. That's why having the right coverage is so important. Coordinated coverage that includes general liability, media liability, errors and omissions and information risk, will help protect companies in a social media world.
This blog has been published with permission from CNA Insurance.
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