Few would have thought at the beginning of this century that social media would have such an effect on our lives today.
When it launched in 2004 Facebook was conceived of as a way for college students to keep in touch with their peers and compare notes. It quickly exploded into the ubiquitous social media platform by which all others are judged. So commonplace has it become that many websites which consider themselves ‘web 2.0′ allow you to log in instantly via your Facebook account. That makes it easy for you to log on and them to scrape a bunch of lovely CRM thanks to your API. Comments you make on news sites and journals can appear on your wall with a link to the story and the Facebook interface also reduces trolling as the troll finds it harder to remain anonymous.
While social media came with issues for businesses, mainly time wasting, it wasn’t immediately obvious how harmful it could be for individuals, companies, corporations and even national security. Now we see that insurance companies are offering ‘Facebook insurance‘, a quick shorthand for insurance which covers corporations against the loss that they could incur should details of their jealously guarded secrets be put out on the web.
For companies such as Coca Cola and KFC these leaks would give their competitors an edge, in making their secret ingredients public generic brands would be able to reproduce the unique taste that makes them market leaders. But that’s really just the thin end of the wedge as we’ve seen with Wikileaks. Having thousands of confidential emails and messages disgorged into the internet would do no end of harm not only to businesses which were conducting sharp practices but ethical businesses who, while being as transparent as possible, still had strategies and objectives which could be used to harm them if they came to public attention.
Who’s Out To Hurt You?
It’s not just intentional interference from a disgruntled staff member or hacker that can cause the problems though, anyone can be a potential security risk especially if your company has its own social media profile.
Risk assessors and lawyers alike advise that getting involved in Facebook, twitter and LinkedIn without prior protection, including insurance that is typically designed for traditional print and broadcast media is a very big mistake. The updated insurance which covers internet leaks still covers defamation, loss of business, libel and copyright abuse but it also offers pre-publication damage limitation publicity expenses and a budget for public relations drives which seek to protect the reputation of the company in question after the publication of sensitive information.
Of course this it mainly a concern for international and global corporations, to small business insurance of this kind is unnecessary although could still be damaged by any revelation of trade secrets but most managers assess that the risk involved doesn’t warrant the expense of such insurance.
Protect Yourself from Yourself
That risk works in the other direction too, in March this year a staff member at an agency working for Chrysler got himself fired and lost his agency the job thanks to putting an uncomplimentary message on his client’s twitter mistaking it for his own.
Now that industries and companies that previously had no contact whatever with the media are Facebooking daily it’s important to know how media law could affect them in the future. You may have office insurance but that’s not geared to covering you if your secrets are divulged online for the world, literally, to see.
Dan Cash is a features writer and former financial researcher currently looking into business insurance. Office insurance can appear to be an extraneous cost to some management but if you’re not properly covered the repercussions can be devastating.