When used thoughtfully, social media sites can be powerful tools for connecting businesses to their customers. However, sometimes careless or emotional employees can say or do the wrong thing online. A school district lifted an image of a bikini-clad minor from her Facebook page and publicly used it in a presentation immediately after an image that depicted promiscuity and alcohol abuse. A sheriff fired six of his employees after they 'liked' the Facebook page of his opponent in the upcoming election. A Michigan hospital chain fired a physician for allegedly posting on Facebook a photo of a patient's backside, under which another user posted what could have been the individual's initials.
These are just some examples of social media mistakes that landed in court. If a business or organization is sued over the use of social media, will its liability insurance protect it? The answer is not certain.
A standard commercial general liability insurance policy covers "personal and advertising injury liability." Among other things, it covers the policyholder's liability for offenses such as publishing material that slanders or libels a person or organization; disparages another's goods, services or products; or that invades another's privacy. It also covers unintentional use of someone else's advertising idea or copyright infringement. However, policy terms limit how the coverage applies.
For example, the insurance will not cover an organization's intentional violation of another's rights when it knew that it would injure that person. If the school district employee who used the photo of the young lady in the bikini knew that her rights would be violated and she would suffer some harm, the insurance would not cover that employee. On the other hand, the school district itself might have coverage if it was unaware of what its employee was doing.
Intentionally posting information that the poster knows to be false may also be cause for a claim denial. If the insured business posted false information about a competitor's service or told an employee to do it, there will be no coverage or defense for the ensuing lawsuit. Conversely, if the information turned out to be false but the employee or business owner did not know that at the time, then coverage may apply.
Finally, statements that insult or offend people but that do not fit within the policy's definition of personal and advertising injury will not be covered. An employee firing back on Twitter at an angry customer will not trigger insurance coverage.
Social media sites have opened up new opportunities for businesses to reach their customers, both happy and dissatisfied. New opportunities can bring new risks, however, and insurance may not cover all of them.
To discuss your Commercial Insurance Program and coverage, call one of our agents today at 314-351-HALO(4256).