Social Media, a Gamble Worth Taking?

Insurers and their clients considering the world of social media have more than enough choices and paths to follow. Now a pervasive part of personal and business communications, social media’s growth has created a new risk landscape. According to a new report issued by the ACE Group, social media’s reputational, legal, and operational risks can impact privacy, security, intellectual property, and employment practices issues, to name a few.

ACE USA, the U.S.-based retail operating division of the ACE Group, along with the Information Law Group, released a white paper that discusses the business benefits of social media participation, and describes how insurers and their clients can respond in a proactive manner to the many risks social media poses.

“Social Media: The Business Benefits May be Enormous, But Can the Risks – Reputational, Legal, Operational – be Mitigated?” was co-authored by Toby Merrill, VP, ACE Professional Risk, Kenneth Latham, VP, ACE Professional Risk, David Navetta, Esquire, CIPP, partner, Information Law Group and Richard Santalesa, Esq., senior counsel, Information Law Group.

“The business benefits of social media participation can be substantial, while the cost of non-participation, or opting out, may mean anything from losing business to losing touch with your customers and important trends in your industry,” said Merrill.

There is also much to lose if your company does not respond proactively to the many risks posed by social media, added Latham. “It is imperative that companies have adequate insurance coverage for their social media activities, and review their coverage parameters and amounts regularly.”

The paper offers advice on setting guidelines for employees, following certain practices to ensure safety and engaging the proper legal team early in the process.

“Organizations need to also identify the laws and legal risks that may apply, ensure they are complying with third-party sites’ guidelines, engage in active site monitoring, and consider creating a response team,” notes Navetta of the Information Law Group.

The authors’ commentary is part of ACE Progress Reports, a collection of white papers, articles, and executive reports on current and emerging risk management issues, and it was produced in conjunction with the Information Law Group.