Social Media has captivated the globe and has changed how we communicate personally and professionally forever. And the scary thing is, it’s ever evolving and changing. The good news for you as a business is that you have more ways to spread your message, sell your products, and profess your opinions for free to the world. The bad news is, that your insurance may not have kept up with the times and is stuck in 1979.
Your Commercial General Liability policy has a coverage part called Personal & Advertising Injury. This coverage part has a sub-limit of liability that should be equal to your Occurrence limit. Personal & Advertising Injury is meant to protect you from among other things, libel, slander, defamation of character and other grisly things that you do that could hurt someone’s feelings. Seriously, it’s meant to protect you from negligently damaging someone’s reputation, or infringing on copyright or intellectual property. This is more of an issue today as technology blurs those lines, so it’s an important coverage.
The standard General Liability policy (ISO CG00 01 12 07) will exclude injury “arising out of an electronic chat room or bulletin board the insured hosts, owns, or over which the insured exercise control” (ISO CG00 01 12 07). As well as Personal and Advertising injury “arising out of the infringement of copyright, patent, trademark, trade secret or other intellectual property rights” (ISO CG00 01 12 07). This includes data privacy breaches and claims resulting from a data privacy breach.
In English, this means that your tweets, blog posts, Facebook notes, and other commentary on social media sites are not contemplated by outdated verbiage still being employed in General Liability policies. Certainly, you can fight it, however you know that means extra time, money, and anxiety. Bottom line, your tweets aren’t covered!
There are increasing numbers of case law and opinions surrounding this issue. My job today isn’t to bore you with a litany of these, but to alert you to your vulnerability.
So how can you get in trouble? Let’s face it; the most intriguing blogs and tweets are the ones that offer contrarian, thought provoking, and often outlandish commentary. In sending out your opinions over cyberspace channels, you may be critical of competitors, inadvertently offend another company or individual, and/or infringe on someone’s brand. If they sure you, you’re on your own.
So what do you do? Fortunately, the insurance companies have found a way to protect you. For consultants like me who own a professional liability insurance policy, the coverage is included there. For other businesses, there is a fairly recent policy that has been created called Cyber Technology insurance. It’s meant to protect your liability for issues related to technology like social media, data breach, and other nasty things like that.
You need to talk with an insurance professional – your broker, agent, or consultant. It’s crucial that you examine your company’s social media practices, including how your employees use it.
Tom Bell an attorney with Perkins Coie, in an article published in Computerworld states:
“Companies are entitled to free speech, but their commercial speech is less protected. The lower protection comes in the form of a higher standard of care for truth and accuracy. So, when company employees participate in social media on behalf of their employer, they subject the company to the same risks as a newspaper or individual, but with less protection.”
Employing a social media policy will help you assess your vulnerability, create policy that works for your operations, and set up a plan to transfer your unwanted risk to an insurance policy that adequately protects your liability and assets.
Your company probably should be active at some level in social media. If it’s not now, you’re probably falling behind the game at some level. Like any other risk you face in business, you need to make this part of a good risk management policy.
Don’t find yourself on the wrong side of a tweet. Go out and become “socially acceptable!”
© 2011 Dan Weedin. All Rights Reserved
