Check it Out: Do You Need Social Media Liability Insurance?

Some worries come with opening any new tech channel — that bad guys might be able to use it to access your data, steal customer identities, pass an employee some malicious software, etc. — but the casual and explosive nature of conversations in Web 2.0 may expose retailers to a new world of risks, some more commonly associated with media companies.

The exposure of such missteps is largely unexplored. Last year, several lawsuits were filed by schools against students who used social media to vent about (mock) their institutions online. In May, The New York Times ran an article about Justin Kurtz, who started a Facebook group called Kalamazoo Residents Against T&J Towing, organizing the Michigan neighborhood against a company that towed his car in allegedly bogus circumstances. The group now has about 14,000 members, and T&J Towing has filed a $75,000 defamation lawsuit over what it claims is lost business. People are suing over what's said on social networks (don't get me started on the number of divorces citing Facebook evidence), and your business is at risk on either side of those cases.

Hopefully no one in your company would start the Citizens Against Our Competitor Facebook group, but you don't get insurance for things you intend to do. It's not hard to imagine a comment, photo or video posted quickly — to take advantage of the instantaneous nature of Web 2.0 — rubbing someone the wrong way and opening a can of legal worms. Most of your company's communications through Twitter, Facebook, blogs, etc. would probably be classified as promotional activities in a court of law, meaning they have to stand up to the same standards as other promotional messages, which is a higher standard than your average blogger or journalist is held to, and may expose you to greater liability.