Does Your Professional Liability Insurance Cover Social Media Risks?

Do you use social media platforms like Facebook, Twitter and LinkedIn for your business? Does your professional liability insurance cover social media risks? You’re not alone. Businesses of all sizes have adopted social media for a variety of uses. A study conducted in 2010 by Burson-Marsteller of the 100 largest companies on the Fortune 500 list found that 79% of them are using some social media platform or corporate blog to communicate with customers and stakeholders. Another 2010 study conducted by University of Maryland Smith School of Business found that one in five small businesses are integrating social media into their business plans. Social media can be affordable, effective communications and marketing tools. But they can also significantly increase your risk exposure to claims that your current professional liability or Errors and Omissions policy may not cover.

The problem is that social media technology and its adoption have grown rapidly and many professional liability insurance policies haven’t kept up. This can leave you and your business exposed to lawsuits claiming your posts, tweets or videos have caused a client financial loss or personal injury.

Traditionally, professional liability or errors and omissions policies provide coverage for professional services – those things you typically do for clients in the course of conducting your business. They also cover your costs to mount a defense against a lawsuit, and will pay any judgments against you up to the limits of your policy. But, you need to review your professional liability policy to understand if it defines professional services to include online activities such as your web site, Facebook Fan Page, Twitter profile, email,  etc. If it doesn’t, you may not be covered. In that case, you should consider adding an endorsement that will include such professional services risks as loss, theft or misdirection of client information via electronic media or computer. Other areas of personal services risk exposure can include allowing unauthorized cyber access to a client’s materials, infecting a client’s system with a virus, or facilitating a denial of service attack on a client’s website. Reimbursing a client for any of these damages could be financially devastating. Make sure you’re covered.

You should also review both your professional liability policy and general liability policy to see whether either covers, excludes or limits claims of personal injuries such as libel and emotional duress.

Please read our other liability insurance cover social media risks articles in this series which discuss two other areas of social media risk exposure: employment practices and product liability.

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