How to Protect Your Business from Social Media Liability Claims.

Your chances of suffering a loss are increasingly affected by your use of the Internet and, particularly, social media. Increasing your awareness of social media liability loss exposures may help you to minimize or avoid them.

Off-the-cuff comments that used to be made at the water cooler or in the privacy of one's home are now published nationwide or internationally. The result? Damages sought by a claim can be more substantial because there are more people aware of the comments as compared to the traditional situation.

What is Social Media Liability?

Social media liability is not a common term, so insurance policies generally refer to the traditional terms of "personal and advertising injury" and extending this traditional coverage to social media and the Internet. Social media makes it easier to libel, slander or invade a person's privacy.

Social media liability refers to claims for libel, slander, harassment, invasions of privacy, violations of intellectual property rights, and even improper employment practices resulting from the use of social media sites, including Facebook, Instagram, Twitter, LinkedIn, Snapchat, YouTube, and even blogs. Some coverage exists for business as well as for personal exposures to such losses.

Do Typical Business Insurance Policies Cover Social Media Liability?

Most business insurance policies include personal and advertising injury coverage that provides some protection for libel, slander, and derogatory remarks, as well as invasion of privacy. Some homeowners and renters' policies also provide personal and advertising injury. Standard business forms may contain language that provides limited coverage because they refer to material published on the Internet or to electronic communications. Coverage may also exist because protection for suits involving libel and slander may refer to defending against and, if needed, covering claims due to incidents of publishing or broadcasting information in any manner.

Employee Related Social Media Liabilities

Businesses' networking-related exposures are typically related to business activities. Businesses may, for example, assign the ownership of a website to a lower-level employee in order to shield the business. That employee may sue for false invasion of privacy, especially if the website contains sordid or proprietary material. Business managers may also announce firings or disclose personal information about their employees that may create lawsuits. Personal networking-related exposures run the gamut of claims, including accusing individuals of crimes, infidelity, failure to pay child support, disclosure of personal or financial information, and posting of pictures or videos in compromising positions.

Social Media Liability Claim Costs

Social media liability claims can be complicated and expensive since they may involve historical postings. In these instances, defense costs may include electronic discovery or subpoenaing information from any applicable social networking sites. Expenses could expand if a party filing a lawsuit demands information beyond a post to one particular site to include posts made on all the social networking sites where a defendant holds an account.

Depending on the nature of the claim, the insured may be faced with multiple lawsuits in multiple jurisdictions, including outside the United States. Defense costs may reflect extensive jurisdictional and venue disputes that have to be handled (and paid for) even before determining if that claim is eligible for coverage.

Coverage for Deliberate Acts

Another issue is the problem of handling intentional (deliberate) acts. Most insurance policies routinely exclude them. An insurance company may choose to deny either legally defending and/or responding to a lawsuit because, in its opinion, the policyholder had full knowledge that published information was false or that an act was an invasion of privacy.

How Can You Help Protect Your Business?

You must be aware of the legal potential in using social media and the claims that can result if defamatory comments are made about family members, friends, exes, etc. There is no immunity from lawsuits simply because such comments are commonly posted on sites such as Facebook or Twitter.

Why an Umbrella Policy Might Be Best for Your Business

Considering what is at stake, especially for businesses, umbrella coverage is recommended as an additional source of protection. Umbrella coverage is also recommended for prolific social media users and bloggers. Although avoiding high-risk behavior is a simpler and more effective way to eliminate problems, it is unlikely that individuals will avoid social media or blogging altogether. A more realistic expectation may be that a person may inadvertently engage in behavior that creates a claim. Individuals should evaluate the risk potential and realize that coverage for social media liability may become a necessary part of everyday life, similar to auto insurance or home insurance.