Social Media’s Rise Has Made Insurance Crucial for Companies

You probably work for a media company, even if you don’t think you do. Nearly every company maintains various online media outlets. Your company has a website and, most likely, social media, where it may hire celebrities and influencers to promote its brand.

The digital stage has redefined the rules of engagement for how companies and consumers interact. With the “likes” and “shares” come legal risks of being a media company—especially when media isn’t part of your core business. As brands rely more on influencers and social media marketing, new insurance strategies are emerging to spread the risk fairly among companies and their content providers.

Web and social media content increasingly comes from third parties. This might include photographs, video, music, slogans, or other written copy. Some high-profile social media accounts are handled by outside advertising agencies. And a company may want to collaborate with social media influencers on projects.

The types of legal issues associated with publishing this content are myriad and can be surprisingly fraught. For example, photographs may be subject to a copyright claim, whether sourced internally or from a third party. Or a copyrighted song might be used without permission in an influencer’s post.

Unlike many other legal claims, if the copyright plaintiff wins, they typically get some or all of their attorney’s fees from the defendant, on top of damages for the copyright infringement itself. This can motivate plaintiffs to chase potential copyright defendants. Additionally, social media content can subject the company to exposure for trademark infringement, violation of consumer protection statutes, defamation, and right of publicity issues. All these claims can be enforced under several federal and state legal frameworks.

Fortunately, for most companies, if a claim arises out of the company’s advertising, its standard commercial general liability coverage may come into play. Many CGL policies provide coverage for personal and advertising injury, which protects against liability for certain offenses that occur in the advertising context, including libel, slander, copyright infringement, use of another’s advertising idea, or invasion of privacy.

But some exclusions may apply, and most insurers have eliminated or substantially limited coverage for cyber losses under CGL policies.

While a company’s own general liability insurance may provide sufficient coverage, it’s reasonable to ask third parties who provide commercial content to have their own insurance, such as CGL coverage, to cover any claims that arise from the content they provide. Also, specialty media liability insurance provides additional protection, whether alone or in conjunction with a CGL policy.

These niche policies can go beyond the specified perils in CGL policies to include all risks arising out of advertising, broadcasting, or publishing. They may also provide coverage for activities that occur during the policy period, regardless of when the claim is first made. Other policies provide internet liability clauses with automatic coverage for websites created following policy inception.

Given the variety of content published by companies—from daily social content to grandiose viral marketing campaigns—consulting with an attorney about your particular risk profile would be helpful. Attorneys can work with your insurance broker to discuss your particular risk profile and make recommendations that suit your budget and business risks. Additionally, the attorneys can identify third-party vendors to help cover your risk.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

David Barnard is partner at Stinson and has first-chaired patent, trademark, false advertising, copyright, trade secret, and other commercial disputes.

Adrianna Chavez is an associate at Stinson and focuses on brand protection, software copyright ownership, and intellectual property infringement disputes.

Write for Us: Author Guidelines