Enterprising Developments

The Murky Legalities of Social Media

Joe McKendrick
Insurance Experts' Forum, March 16, 2011

By now, many of you may have heard about comedian Gilbert Gottfried's insensitive and very ill-timed tweets, attempting to make light of the ongoing tragedy in Japan. Aflac quickly fired Gottfried, the voice of the Aflac duck. The insurer was morally right to terminate Gottfried, and likely had a clause in its contract that the arrangement could be terminated if the comedian intentionally brought any harm to Aflac's reputation and standing with customers—a good portion of whom are in Japan.

The episode also points to another matter that needs to be considered by insurance companies as well: the liability incurred by employee statements in social media forums. The Federal Trade Commission is already cracking down on statements made in social media forums by corporate representatives.

But all statements made on behalf of a company over an electronic channel, be it Facebook, Twitter or something else, also are subject to legal ramifications. E-mail is already recognized as carrying the same weight as any other corporate record or statement. That is, companies are liable for the statements made by company representatives within e-mail communications. This has been extended to instant messaging, and there's no reason why statements posted on social media sites don't also fall under the same umbrella.

The United Nations Commission on International Trade (UNICTRAL) Model Law on Electronic Commerce, which serves as the basis for many national laws, defines a “data message” as “information generated, sent, received, or stored by electronic, optical, or similar means including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex, or telecopy.”

A discussion of some of the legal ramifications of social media information can be found here.

What's the best way for insurers to approach these matters? It doesn't make sense to attempt to clamp down or choke off employee usage of these channels. If anything, they're opening new doors to markets and rich customer engagements. Any insurance company that attempts to choke off employee social media adoption will fall behind, and subject itself to an over-controlling and hidebound environment.

The best approach is to have well-defined and well-communicated social media usage policies, which help to make employees aware of what they can and should not say in online venues.

Many new legal areas continue to be tested. But, just as it has been in any forum for years, it's important for companies to make sure employees are trained and knowledgeable when it comes to representing the company to the world.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

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