Social Media Mayhem: How Liability Insurance Protects Your Business
In today’s digitally driven world, social media is an essential marketing platform for most businesses. It’s also a rather unruly place with the potential to create serious liability headaches for you as a business owner.
Since social media and digital business aren’t going anywhere, the best course of action to avoid stress and potential lawsuits, is to protect yourself against threat well before it ever becomes a problem.
Let’s look at how digital business activity and social media contribute to online business risk and potential liability.
Defamation & False Advertising
Some of the biggest risks businesses face with regards to social media posts are defamation and false advertising risks.
Defamation
Defamation occurs when a false statement about another party is made that damages that party’s reputation.
Two kinds of defamation are slander and libel.
Slander is when the statement is oral and libel is when the statement is written, and both are types of defamation.
False Advertising
False advertising occurs when misleading, unproven or untrue information is used in the promotion of products or services to consumers.
For example:
Say you post a new vitamin supplement from your health food store on social media claiming it will turn any normal person into a wildebeest in 10 days or less. Working under the assumption that this would not be possible with any type of vitamin supplement, that would make your statement false advertising.
Or…
Another way false advertising presents itself is in exclusivity claims. If your business claims to have the “one-and-only” product or service of some kind, but in actuality, sell the same service or product as even one of your competitors, that’s false advertising.
In the United States, businesses accused of slander, libel and/or false advertising may be sued by the affected party(ies). These lawsuits often result in costly legal fees, not to mention any settlements or judgements that might have to be paid.
So how do you protect yourself against these marketing and advertising risks?
General Liability Protection for Marketing & Advertising
Because many businesses face these risks, General Liability Insurance (GL) policies have long provided protection against most slander, libel and false advertising lawsuits. For years, general liability provided all the protection typically businesses needed against these risks.
The advent of the internet in general, and social media in particular, have increased these risks for many businesses. Not only are there new platforms where businesses might publish something that’s defamatory or false, businesses are also publishing statements at a faster rate than they were before, increasing risk by way of frequency.
As a result, new risk has emerged, which may not be covered under the fine print of every General Liability policy. Since not all GL policies have been updated to adequately cover all of today’s digital risks, some businesses opt to include additional liability coverage to bridge the gap.
Protecting with Additional Liability Coverage
While some General Liability policies have incorporated adequate digital protections into their terms and conditions, other types of coverage have emerged to help provide specific coverage for digital activities that but businesses at risk.
To help protect against new and increased risks presented by online activities and social media, insurance companies often offer cyber liability, media liability, and umbrella policies to cover the extra innate risk faced by some business industries.
As an added benefit, some new insurance products that offer added liability protections for social media activity frequently go beyond just defamation and false advertising.
In many cases, policies that focus specifically on protecting your online activities often cover:
- Online copyright infringement, which occurs when a copyrighted image is published online without permission
- Breaches of contract, which occurs when an agreed-upon contract is violated
- Invasions of privacy, which occurs when photos of people are published without the necessary releases
Finding Social Medial Liability Protection for Your Business
Not every business needs more than just General Liability to cover their online activities. But the best way to make sure you don’t have holes in your coverage making you vulnerable, is simply to give your agent a call, and ask. Prepare to avoid risk so you can focus more energy on the important task of building your empire, and worry less about the liability what-ifs lurking in the digitally driven day-to-day of modern business.
