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Social media insurance - how to protect your business online?

by Get Indemnity™


Most businesses have come to realise the importance of purchasing social media insurance

With the number of users now in the billions worldwide it’s hard to ignore social media, but how do you manage your exposure to third-party litigation.

Whether you operate on B2C or B2B basis, spreading awareness of your brand, driving potential customers to your website, operating as a thought leader and receiving customer feedback, all adds value to your business.

However, with greater numbers of UK companies now creating social media accounts, consideration should be made to social media insurance such as professional indemnity insurance and cyber insurance.

Social media risks arise because the platforms don’t have the same level of editorial or legal controls that traditional media once did. Therefore, promoting your business or promoting someone else’s business, creates a number of potential risks that need to be managed.

Sensible businesses will maintain business insurance to provide cover for legal expenses and damages. However, purchasing cover is only part of the solution in being able to successfully manage your social media exposure.


Social media risk to business


Below we take a look at social media insurance risks created by publishing content and potential controls to mitigate your exposure to third party claims.

Defamation risk

Defamation is the making of a false statement concerning a person or business that damages their reputation. Libel is a written statement, whereas - slander is a spoken statement.

The good news is that defamation cases in the UK have reduced since the introduction of the Defamation Act 2013. The burden of proof has moved from the defendant to the claimant and also requires the claimant to prove they have suffered serious harm.

However, the social media risk to your business remains because of the availability and speed of publishing content via Facebook, Twitter, Instagram means that everyone within your business can be a publisher. 

Intellectual property risk

Facebook, Twitter, Instagram allow the posting of material that may be copyrighted. The social media sites do not own the material that has been posted, however by posting you agree the site can use the material. 

If you fail to obtain the appropriate licences to use materials, such as images or music in your marketing content. Your business may receive a claim for damages from the content owner.

Allegations that material has been plagiarised from other copyrighted material is a serious social media risk. The creation of material may also infringe copyright if an employee passes off someone else’s work as their own.

Confidentiality risk

If personal information is disclosed via social media without the individuals consent you could have breached GDPR regulation and there maybe be cause for damages. It doesn’t matter whether it was intentional, accidental or the personal information was stolen.

The reach of social media means that information can be disseminated at speed with little chance of containing the damage. Education and training for your employees on social media risks and what information can and can’t be posted should be clear and concise.

Social media risk management

Any risk management policy or procedures to control social media risk should identify the distinction between business and private use. If you allow for private use in the workplace, it should identify what this means in practice.

Good governance can enhance the benefits of using social media with a structure and coordinated use across the business. Creating a social media policy for your employees will provide a set of guidelines which will outline how to operate on these platforms. 

Manging your social media risk will require you to monitor your online presence to: 1) ensure internal compliance with your policy; and 2) manage any reputational risks from negative reviews or posts.

Timely access to a good legal defence offered under professional indemnity insurance, can make all the difference in resolving allegations quickly. Whereas, cyber insurance can provide cover if personal information is stolen and you are required to notify the affected individuals under GDPR legislation.

Social media risks continue to evolve and having adequate protections in place to mitigate the exposure from costly third-party claims is necessary in the digital age. Speak with your insurance broker to ensure you have sufficient protection in place.


Originally posted by Get Indemnity

This guide is for information purposes and based on sources we believe are reliable, the general risk management and insurance information is not intended to be taken as advice with respect to any individual circumstance and cannot be relied upon as such.