Do You Need Social Media Liability Insurance?
As a small business owner insurance is a standard part of doing business; from automobile’s to inventory, disability claims to fire insurance, insurance allows small business owners to prepare for the unexpected and ride out the storm should a “worst case” scenario take place. Despite the familiarity with many traditional forms of coverage, there is still one policy that escapes the attention of most small business owners; social media liability coverage. However, that is getting ready to change. Big business entities have already flocked to the insurance as a way to protect against the unexpected…a tool of even greater importance to a small business which doesn’t have the internal resources to ride out a storm.
Risk #1 – Authority Figures
Understanding authority in the age of social media isn’t as simple as it may seem. Social media has revolutionized the way we communicate as a society…and the level of trust placed in different authority figures. For example, when asked how likely they would be to trust a CEO during the year 2009, only 31 percent of people surveyed indicated they would believe the information to be credible. Today, thanks to social media, that number has escalated to roughly 50%. Others positions held to be trustworthy include academic or subject level experts (70%) and friends/family etc…
But why would this even matter? As a social media management firm, we often work with subject matter or technical experts from a wide range of different disciplines. Without realizing it, many of these experts may inadvertently places their reputation on the line or increase their legal liability when conversing online via a social media platform…especially if they fail to separate public from personal pages. However, even with a proper separation, it’s not uncommon to see a perceived authority figure comment or attempt to help but later have it backfire as “advice”. Lawyers, financial accountants, doctors and others are especially at risk.
Risk #2 – Getting Personal vs Being a Personality
As social media marketing and communication becomes more popular, it’s easy to blur the lines between getting personal and being a public personality. This is especially true among movie stars, musicians or other “famous” people but even trainers, consultants or anyone else that does business under their own name may also be subject to the same influence at a local level. Unlike the (real or perceived) authority figure above, a public personality frequently encounters a tremendous deal of public scrutiny across all areas of their life. Personal preferences, likes or dislikes come under increased attention and may be misconstrued without close attention to detail. Even worse, innocent statements may lead to major upheavals without proper disclaimers.
Once again, as a social media management firm, reputation management is a top priority for clients both large and small including defamation or trade liability. When in doubt, watch those words carefully!
Risk #3 – Truth in Advertising
As the use of social media marketing continues to make inroads into traditional product reviews, bloggers and consumers are increasingly turning to sites like Facebook to learn more about a product or service. Not surprisingly, bloggers and reviewers are also using social media to share reviews. That opens the door to one of the most commonly encountered mistakes made by average small business owners…hiring bloggers or others to perform a product review or testimonial without disclosing endorsements, partnerships or other affiliations. Truth in advertising applies to social media marketing including any business relationships, free merchandise, paid advertisements or testimonials etc…Given the rapid changes in social media marketing, this is not an area for the novice. If in doubt, always ask your social media manager about the best course of action.
Risk #4 – Intellectual Property
This is an area every social media management firm should take very seriously…sadly, many small business owners are utterly confused about Intellectual Property (IP) rights and responsibilities. What constitutes “fair use” of content, photographs or other elements? Does the distribution method matter? What about the number of times used or whether or not a profit was generated from the activity? Can stock photographs or video’s be used in general advertising…what about a book? These are just a few of the commonly encountered IP issues which could place nearly any sized small business at risk.
Risk #5 – Security Breach
It’s simple to slip up and make a quick mistake but the viral nature of social media makes it worse than ever as a seemingly small upset can quickly turn into a major nightmare. Protecting the privacy of a customer to retaining the trade secrets of a business partner…it can go wrong faster than you might ever imagine! Consider these two recent examples; a local healthcare provider responded to a client testimonial by “so glad to hear your back is feeling better”. An innocent comment that failed to take patient/provider confidentiality into account. Or what about a small business owner that excitedly announced an upcoming product in the works…without stopping to think about the implications to the partner company who had not made an official press release! Clearly, security breaches come in all shapes and sizes from the deliberate theft of private information to innocent statements made on the spur of the moment. However, intent does not always equate to the level of harm or legal rights of the offended party.
Each of the above 5 risk categories place small business owners at legal risk and represent just a few of the ways in which liability insurance may become a valuable part of a total protection package.