An online presence is a must-have for companies to stay relevant in today’s society and connected to the current social media addicted generation. Because of this, a new must-have in our overly litigious nation is protection against liability. That’s where a new type of insurance comes into play.
Media liability insurance is coverage against claims of defamation, invasion of privacy and copyright and trademark infringement. These claims are not new risks for media related companies, such as newspapers, broadcasters, movie studios and production companies; however, such risks are new for non-media companies with a social media presence. The risks are also exacerbated by the speed at which words, images and videos can be posted, cut, pasted and resent all over the internet. Chubb Insurance company, which has long been recognized for its media liability insurance products, is trying to widen its reach with new products tailored to social media risks and marketed to non-media companies.
For non-media related businesses, putting up a Facebook profile for the company would likely be considered by the law to be “promoting the brand,” and the media on the page would thus be governed by the rules for commercial speech. Commercial speech, which has the intent of convincing the audience to buy a certain product or take a particular action, is not protected to the same extent as other forms of speech under the First Amendment. The main concern is that companies are truthful in their advertising, and now in their social media postings as well. Whereas posting on a social media profile is very casual and passive for most individuals, companies should be aware that there are concrete rules for their postings, since they could essentially qualify as mini advertisements.
According to Betterly Risk Consultants, regarding media liability insurance, “as the media business grows beyond traditional media hubs, we expect to see more local and regional [insurance] brokers needing to develop expertise in this line.” Also known as errors and omissions insurance, this media liability coverage would at least protect a company from bearing the full cost of defense for lawsuits relating to a small error or negligence in the ideas or expressions contained in the media material published via social media, such as defamation of another product or company. It is expected that many corporations will be considering if not implementing media liability coverage in the near future.