The insurance world is catching up with the online world, with clients who engage in social media now able to select policies covering the sometimes substantial risks of defamation and copyright infringement previously the domain of print publishers.
From the dotcom boom to the social media explosion, the pace of change in digital corporate practice has introduced risks that until now have outstripped the ability for most underwriters to keep up.
With universities now teaching all business internet traffic directed through Facebook, business is increasingly engaging in social media not just for marketing, but also to interact with their customers and employees.
Even our legal system has scrambled some relevant social media legislation together, with website owners now recognised, in some circumstances, as having a duty of care to their users. An individual can now be served notice via their Facebook profile if they cannot be physically located; and in Australia, individual profile pages are able to be used as evidence before a court.
And suddenly, legal risks such as defamation and copyright infringement that previously were primarily the domain of publishers and broadcasters, are being taken on by a much wider – and far less informed – community.
Not just for the big boys
Corin Hansford is a Senior Account Manager for OAMPS Consulting and has over eight year’s experience in writing media insurance.
“With websites and alternative methods of content delivery such as mobile SMS, there is now a wider range of exposures,” he says.
Hansford’s clients include television and radio broadcasters, news agencies and television production companies. A number of his clients are now opting for ‘multimedia’ liability policies rather than traditional defamation policies that only covered a smaller range of risks based on single platform delivery. Many of these clients host discussion boards or social networking sites which can be areas of risk for the host or the clients who post on third-party sites.
“In the past we had to go to the London market, or suggest additional wording as endorsement to policies to protect our clients, but the Australian market for media insurance has now caught up,” states Hansford.
He further remarked that: “Insurers are offering products that include broader cover for the various risks associated with content creation and dissemination including via new media.
”While the majority of Hansford’s clients are experienced broadcasters, he warns that it is unwise to assume that these risks extend only to the large operators like newspapers and television stations, stating: “The internet makes a company’s exposure global and complaints can come from anywhere – regardless of the size of the company.”
Freedom to Tweet
Peter Black is a Senior Lecturer at the Queensland University of Technology School of Law. He is editing a book with Kelley Burton titled Legal and Political Issues of Blogging and produces his own blog, Freedom to Differ, which explores legal issues around media and the internet.
“Whenever you are putting yourself out there using new communication technologies like Facebook or Twitter, there is inevitably going to be some legal issues that will potentially arise for the individual involved – and also, if they are representing their workplace, for their employers,” says Black.
He says that while engaging in social media does involve certain legal risks, companies without a culture of using social media to engage with their employees and customers will increasingly be disadvantaged. “Social media is not only a very effective way to manage customer relationships, increasingly consumers are expecting it as well,” he says.
WE LOOK AT THE RISK MANAGEMENT OF ANY SITES THAT WE UNDERWRITE.
“And the most common legal pitfalls in the Australian context are defamation and copyright infringement.”
Both employers and employees are potentially liable, he says, and both need to understand these risks.
Training and education are the most obvious and effective strategies to reduce risks, Black adds.
“Employers need to ensure that they have a sensible social media policy, that they offer some guidance and that they ensure that their employees arein accordance with those social media policies at all times."
And while there have so far been no cases in Australia where social media use has led to a lawsuit, at the time of writing there were early signs of a legal wrangle that may lead to Australia’s first Twitter defamation case.
Unofficial culture
University of Canberra academic Julie Posetti, an avid user of Twitter, used the social media platform to tweet the proceedings of an academic conference held in Sydney in November 2010. Posetti quoted rural reporter Asa Wahlquist who made critical statements about her editor’s role in election reporting.
The Editor-in-Chief of The Australian, Chris Mitchell, stated that he intended to sue Posetti, however when a tape of the conference proceedings emerged supporting the accuracy of her tweets, instead sent a demand for an apology, which Posetti (via her employer’s lawyers) refused. This is a highly unusual situation, says Peter Black. At the time of writing, the case has not gone any further, though it may still get to court.
“There haven’t actually been any cases in Australia where an employer has been sued, however there have been some instances of individuals being sued or threatened to be sued for defamation or the like as a result of something that they have posted on Twitter or on Facebook that has not involved the employer area."
However, Black says, it rarely gets legal. “There has been an unofficial netiquette that has developed in the space instead,” he says, explaining that a clear process should be provided whereby the site owner or moderator can quickly remove an offending item from the website.
“This unofficial ‘notice and take down’ culture deals with almost all of these instances in a practical sense. With a process that takes down something that’s defamatory or a breach of copyright, the overwhelming majority of individuals tend to be satisfied."
If a company engages in social media, risks are immediately reduced if they have processes in place that fit in with existing internet cultural norms and practices.The key is employing people who ‘get’ social media – and making sure there is adequate training and guidance in place, says Black.
Huge opportunities for brokers
Axis Product Development Manager Quenten Dawson says that there are now plenty of opportunities for brokers keen to specialise in social media insurance.
“Multimedia is a growing field of business, with the few brokers who specialise focused on the top end of town,” he says, adding that any enterprising broker who could look at the perils and discuss these with a number of underwriters will find a growing market.
“We think that there is a huge market in the lower end of town that is not being catered for at this stage.”
Axis has developed a multimedia product that covers traditional broadcasting and publishing (like TV and radio stations and newspapers) as well as graphic artists and online content providers creating content that will cover various jurisdictions.
Dawson says it’s a very modular product, easily tailored to different typesof companies. Advertising agencies, for example, will have different needs to a documentary producer.
“It goes far beyond defamation. For example, perhaps a graphic artist has inadvertently used someone else’s intellectual property. Maybe a filmmaker strays into somebody’s property inadvertently – we can cover invasion of privacy, there’s a lot of scope.
THERE HAS BEEN AN UNOFFICAL NETIQUETTE THAY HAS DEVELOPED.
Social media is an area of huge growth, he adds.
“We do consider Facebook and Twitter and things like that are insurable, depending on the type of site that we are looking at,” says Dawson.
A business that is regulating its sites and its social media participation well and is taking measurable steps to manage its risk is definitely a candidate for insurance, he says.
“We look at the risk management of any sites that we underwrite, and try to get a feel for the philosophy of the people who own the site to make sure they’re not trying to elicit inflammatory responses to get people involved,” he explains.
“When a company is watching what is being published and says in any social media type environment that it is involved with, we would certainly be looking to protect our insured.
”Before insuring websites or multimedia organisations, underwriters will investigate the ownership, what lawyers are involved, disclaimers that are issued, processes in place – and the experience levels of editors or journalists who might provide content.
“If we’ve got a feel that a client is very responsible, then we are interested in looking at insuring them.
”Astute brokers are running through various risks with their customers and starting to generate enquiries to Axis, Dawson says.
“Our clients are brokers, so if they have a client who has a particular need, our underwriters will definitely look at the issues. They will try to work out what the risks areand how the client is trying to mitigate those risks.”
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