Does Social Media Increase the Risk of Errors and Omissions Claims?
According to a survey done by the Nielsen Company, social networks and blogs are the most popular online category when ranked by average time spent globally. Facebook is the heavy hitter of social media, with about 67% of global social media users visiting the site per month. As we discussed in our post entitled “The Value of Social Media Networking for Insurance Agents and Brokers”, there’s been increasing evidence that social media use is beneficial for businesses. However to make the best use of social media and minimize the risk of a loss or a lawsuit, it’s important for company owners and managers to be aware of social media best practices as well as any cyber laws or regulations there are in their business or industry.
Increasing presence on social media allows you and your clients to increase interaction with consumers and engage in conversations that break down traditional barriers to communication. An important factor to keep in mind however, is that businesses no longer have control of the message the way they once did. In this online environment, the corporate brand and reputation are at risk as consumers give voice to their thoughts and experiences through social media sites. Companies are also at risk of failing to comply with the various laws and regulations that relate to content posted on social media.
So what potential Errors and Omissions claims could you or a client face using social media? The exposures can range from advertising, contractual liability, defamation, offering erroneous recommendations, and could even extend to antitrust issues. These aren’t new exposures to your agency or to your clients’ businesses, however the nature of social networking sites does in fact impact errors & omissions in several ways.
With all of this in mind, it’s important to for you and your clients to give careful thought to what the goals are in using social media tools, before getting started. When a business chooses to move forward with a social media marketing plan, they should decide on their goals, and then consult with qualified legal counsel. Following legal advice that is specific to the planned use of these social networking sites will allow you or your client to be able to enjoy all the benefits of social networking with a peace of mind that steps have been taken to mitigate risks.
At PLRisk Advisors, we provided policies such as Errors and Omissions Insurance for a variety of professions, Directors & Officers Insurance, Employment Practices Liability, Privacy & Network Security, Commercial Crime, and Fiduciary Insurance. For more information about our coverages, please contact us today at (855) 403-5982.