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Protect against social media blunders: Do you need special insurance coverage?

Business social media mistakes

Lisa Chu has a simple rule for her employees: Never post anything on the social media accounts of Black N Bianco that they wouldn’t want to share with their grandparents.

Chu, founder and owner of the children’s formalwear company based in El Monte, Calif., says this policy has protected her company from social media blunders that could generate negative headlines or, even worse, legal action.

“The guideline for my company’s social media use is very simple: Educate or entertain our target audience in a professional and witty manner, do not post any offensive or obscene content and engage with our customers in a friendly fashion,” Chu said.

That’s a good policy in an age in which businesses are increasingly expected to maintain a social media presence. But even a strongly worded social media policy might not be enough to protect your business. You might need to consider purchasing supplemental insurance to protect your company against social media mistakes.

Business social media mistakes abound

Twitter, Facebook and blogs allow you to engage with your customers and build your business’ brand. But they also leave your company open to potentially expensive legal actions.

What if your employees post a racist or offensive comment on your company’s Twitter account? What if a worker uses your Facebook page to post disparaging comments about your competitor’s products? And what if your employees post copyrighted information – such as someone else’s photos – to your company’s blog?

All of this can lead to potential legal action against your business.

You can protect yourself, though, through a combination of purchasing the right insurance coverage and creating written social media policies.

It doesn’t hurt, either, to study your customer base and determine what might offend them.

“The real key is to know your customers really, really well,” says Chad Reid, director of communications with JotForm, a San Francisco-based firm that helps customers create business forms. “Who is your audience? Is what you’re saying on social media going to speak to them the right way? All brands are prone to slip-ups, but taking the time to research and understand your followers will go a long way.”

The right insurance covers most mistakes

Your business' general liability insurance should protect you against a wide range of social media errors. If your employees post negative comments about your competitors’ products or make racist or otherwise offensive remarks on your Facebook page, general liability insurance should provide you with financial protection.

See also: 5 common business insurance mistakes, and how to avoid them

And if your employees post photos that they find online without first getting permission from their copyright holders, general liability insurance should again provide protection.

But Jonathan Paul, managing partner of the Tech Law Group in San Diego, says that businesses might need to purchase supplemental insurance to make sure that they are completely protected from social media mistakes.

Extra layer of protection: Media liability insurance

The challenge? Every business is different. Business owners need to consider their existing policies and their use of social media when determining whether their existing general liability insurance is enough protection or whether they need to purchase additional coverage. The best way to do this? Meet with your insurance provider to discuss your options.

For instance, what if you hire a photographer to snap photos of employees using your company’s skateboards in public? Maybe the photo you post of a skateboarding worker also includes a shot of a man eating an ice cream cone in the background. If you don’t get permission from that man and still post the photo online, can that ice-cream fan sue you for invasion of privacy?

That’s a tricky legal question, and it’s one of the reasons why a supplemental insurance policy known as media liability insurance might be worth your business’ investment.

This insurance, also known as entertainment errors and omissions insurance, is designed to protect publishers, broadcasting companies and other media firms.

The insurance is also a good fit today for small businesses because so many companies are relying on Twitter, Facebook, blogs and other forms of social media to broadcast information, anecdotes, advice and videos with their customers.

This sharing exposes companies to new risks. Yes, their employees might post questionable, inaccurate or offensive content on their social media accounts. But there's also risk in providing advice or recommending products through social media. What if a customer follows your blog's financial advice but ends up losing money? That customer might take legal action against you.

Media liability insurance can provide the extra protection your business needs. Paul says that businesses today must take a closer look at their insurance coverage to make sure that they have enough protection.

Social media policies: Put it in writing

Insurance is a key way to protect your business from social media blunders. But it helps to supplement that insurance with another key form of protection: a written social media policy, Paul says.

Businesses running Facebook, Twitter, Pinterest and other social media channels need to spell out in writing what they expect from their employees. These policies should state clearly what employees are allowed to post, who is allowed to post and what workers can’t post.

Bill Fish, founder and president of Cincinnati’s, also suggests that companies take one simple action to protect themselves: Require employees to share their posts with someone else in the company before hitting “post.”

“I can’t express how many times we have seen hastily written content that someone hits ‘post’ on without putting too much thought into. It then comes back to bite them in a big way,” Fish says. “Having another team member read over any content before posting it helps you to avoid 90 percent of social media gaffes.”

And if you or one of your employees does make a social media mistake? Fish recommends that you quickly take responsibility for it.

“Your best play is to own the mistake,” he says. “We live in a forgiving society. Delete the post and make an honest, heartfelt apology. Accepting ownership goes a long way.”

See also: 5 signs your business needs more insurance

Plus: Managing the liability risks of remote employees

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