The explosion of social media networks–a loosely defined area of converging media and technology that encompasses everything from Facebook and MySpace to Twitter and text messaging–has created enormous opportunity as well as emerging risk for the business professionals who create, manage and use them.
"The social media sites have interesting liability related to them because many of them are open forums and to the extent that people are posting things that create liability, who is liable, the individual or the enabler?" notes Paul Romano, President of OneBeacon Professional Insurance. "The idea of liability relating to those who publish or those who facilitate is fascinating. That's going to be an interesting area of law to watch over the next decade."
In fact, watching over the social media arena is key part of Laurie Sablak's job at OneBeacon. Perhaps surprisingly, social media directly relate to her management of OneBeacon's employment practices liability insurance (EPLI) product.
"Almost a third of employers make hiring decisions based on information that they find in social media networks," she explains. "If firms haven't thought about what their policies are, they can potentially leave themselves vulnerable to discrimination claims. Certainly it brings up the need to have additional policies and procedures related to social media activity."
She notes that there is scant formal case law around the issue, "but we expect that case law to come."
As for social media's impact on insurance? "I use social media as an underwriting tool," Sablak says. "Seeing how a firm portrays itself in a variety of different media is an important information about a firm's culture."
Companies must embrace a cultural shift and appropriately deal with the risks created by social media, but in general, Sablak sees the rise of social media as positive, not something to fear.
"It really has potential to improve communication within firms, to make firms better employers," she says. "If a firm works at maintaining its social media both internally and externally, it's including people and communicating the information people need to know in order to be engaged in the firm. Anything firms can do to wrap themselves around social media is only going to help them as employers with the younger generation."
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