Perils of the digital world
Business is increasingly engaging in social media not just for marketing, but also to interact with their customers and employees. It has been difficult for most underwriters to keep up.
The risks of defamation and copyright infringement previously the domain of print publishers have now become part of the on-line media exposures, along with issues such as cyber crime and breach of confidentiality risks.
Our legal system has also struggled to keep up. The Australian Government is watching with interest how Europe and the USA deals with issues of social media and threats to consumers. Website owners in some circumstances, carry additional risks such as having a duty of care to their users. An individual can now be served notice via their Facebook profile if they cannot be physically located; and in Australia, individual profile pages are able to be used as evidence before a court.
With websites and alternative methods of content delivery such as mobile SMS, there is now a greater range of exposures. Many clients are now opting for ‘multimedia’ liability policies rather than the traditional defamation policies which only covered a smaller range of risks based on one simple form of delivery. Many of these clients host discussion boards or social networking sites which can be areas of risk for the host or the clients who post on third-party sites.
Insurers are now starting to offer products that include broader cover for the various risks associated with content creation and dissemination including with the use of new media.
These risks are not only applicable to the large operators like newspapers and television stations, but also to any platform using the internet. It also makes a company’s exposure global. Complaints can come from anywhere in the world regardless of the size of the company.
Whenever you are putting yourself out there using new communication technologies like Facebook or Twitter, there is likely to be some legal issues that will potentially arise for the individual involved . Even more so for employers if you are representing their workplace.
Engaging in social media involves certain legal risks. Companies without a culture of using social media to engage with their employees and customers will increasingly be disadvantaged as it is a very effective way to manage customer relationships. Customers increasingly consumers are expecting it too,
Both employers and employees are potentially liable for defamation and copyright infringement, and they need to understand these risks. The best advice is to provide training and education.
Employers need to have a good social media policy. They need to ensure that their employees follow these social media policies at all times.
If a company engages in social media, risks are immediately reduced if they have processes in place that fit in with existing internet cultural norms and practices. The key also is employing people who understand social media.
There are multimedia liability policies that cover traditional broadcasting and publishing (like TV and radio stations and newspapers) as well as graphic artists and online content providers creating content that will cover various jurisdictions. They are easily tailored to different types of businesses such as Advertising agencies who, for example, will have different needs to a documentary producer.
It is not just for defamation but also for Insured’s that may have inadvertently used someone else’s intellectual property such as a Graphic Designer or an E-book creator. It can cover invasion of privacy if IT systems are hacked into and so on.
Facebook and Twitter and similar can be covered. A business that is regulating its sites and its social media participation well and is taking measurable steps to manage its risk is more likely to obtain insurance.
Insurers will consider the risk management of any sites that they insure, and try to get a feel for the philosophy of the people who own the site to make sure they’re not trying to elicit inflammatory responses to get people involved.
Before insuring websites or multimedia organisations, underwriters will investigate the ownership, what lawyers are used and any disclaimers that may be issued along with the processes and systems in place. They also consider the experience and knowledge of the editors or journalists who might provide content.
Insurers are interested in insuring any client that they feel acts responsibly. They will try to work out what the risks are and how the client is trying to mitigate those risks. Implementing a good Risk Management system to these risks including transferring some of these to Insurers will offer good protection for your company.
If you need help on these risks, do not hesitate to contact us at CPR Insurance Services. We are experts who just may save you!