Liability Exposure for Social Media Communications

Few people likely understand the potential liability exposure that flows from public statements made on social media outlets such as blogs, Twitter accounts and Facebook pages. This RIMS 2015 session explored the potential liability exposure that organizations face by using social media and the insurance available to protect against these risks.
Speakers included:

• Renee Crow, Vice President, Risk Management, Kimpton Hotel & Restaurant Group, LLC
• Darren Teshima, Partner, Orrick, Herrington & Sutcliffe LLP 

Risks of Social Media

Although, there are many rewards that can result from social media, considerable risks exist. Is your organization creating risk without even knowing it? Here are some risks that can emerge from social media interaction:

• Pressure to respond to breaking news can lead to rash actions. Do you have the proper training in place so that people know how to respond in a matter that protects the organization?
• Rapid interaction with audience could lead to intemperate remarks to customers.
• Excited responses may lead to disparagement of competitor and their products. Sometimes the best response to a tweet is no response.
• Efforts to stand out may result in posts contrary to the company’s general tone or message. You must have one voice to sound authentic and be careful when trying to push the envelope to stand out.
• Short messages can be subject to interpretation. Readers can misconstrue your message.
• Space limits may encourage shortcuts and omission of required fine print.
• Casual, interactive environment can cause disclosure of private information. This is a large concern with undesignated responders. Every employee should understand the impact they can have in this area.

How to Mitigate Social Media Risks

The following measures can help mitigate the risks associated with your company’s social media use:

• Implement a company-wide social media policy. To make sure it is communicated and read from the top down. Create a process to prove employees have accepted and reviewed this policy. People need to be aware of the consequences.
• Limit the number of individuals authorized to post to your company’s social media accounts.
• Provide marketing training to ensure a consistent voice across accounts throughout the day.
• Vet planned promotions with human resources, legal and/or business teams, as appropriate.

Insurance That Applies

Personal and Advertising Injury CGL Coverage

Coverage: Oral or written publications that slanders or libels an organization, uses another’s advertising idea, or infringing upon another’s copyright. 

Exclusions:

• Companys with a main business of advertising, broadcasting, publishing, web design or providing Internet service, chatrooms and bulletin boards. 
• If the claim alleges the company gave false information about the price or quality of products or infringes or another’s patent or trade secret. 
• The unauthorized use of someone else’s name or product. 
• When a claim alleges that the company knowingly violated someone else’s rights.

Multimedia Liability

Coverage: Includes broader coverage concerning “media material” like images, numbers, graphics, sounds and words. Covers damages and claims expenses resulting from product disparagement, defamation, invasion or privacy, trademark/copyright and domain name infringement.

Exclusions:

• Multimedia liability includes the same standard exclusions as CGL with additional exclusions, including no coverage for fraud claims or claims of misrepresentation or false advertising of goods and services.
• More specific coverage leads to more specific exclusion.
• Regulator claims are excluded.