Social media is becoming an integral part of the new marketing strategy. Many would argue that it is now an integral part of any comprehensive business plan. As more companies are embracing social media, we will probably also see more mishaps like the infamous Red Cross Rogue Tweet and the F-bomb on Chrysler. Beyond PR damage control, how can companies protect themselves? Can they actually insure their tweets?
As a social media strategist and business owner, the question of liability insurance is very salient. But how do you insure a social media service? Is it marketing? Yes. Is it customer service? Yes. Is it outside the standard definitions of customer service and marketing for insurance companies? Yes.
Most insurance companies do not have a “social media” insurance package because the liability has yet to be properly measured. In the world of short attention spans and tweets that can last 10 seconds or 10 months, how do you measure the liability of a bad message?
Lloyds of London has started to investigate Twitter Insurance. The Elin Group, Lloyd’s underwriting group that focuses on high-risk clients and provides special insurance services for foreign correspondents, TV personalities and film crews operating inside war zones, are looking into the factors that affect insuring tweets.
It seems a little strange that tweets are being lumped into a high risk group with foreign correspondents and war zone film crews. But that is the result of the unknown quantity. We have yet to fully quantify the positive impact of social media. We know that it is big and the reach is exponential. But we don’t have a dollar amount attached to a good tweet. So how do we quantify a bad one?
The depth of the effect of a bad tweet will be affected by a number of factors
- The level of influence of the tweeter
- The size of their network
- The number of times it is retweeted
- Who retweets it
- How it is handled
- The nature of the message
It is possible that things like Klout score will become a factor in establishing influence. Though many of us question the true significance of Klout, it is one of the only tools that is measuring influence. Other factors may include who is managing your social media, and whether or not you have a social media policy and an established risk management plan.
The social media policy is an important issue for insurance companies because not only does that policy determines how you tweet and post on your social media, it also includes what is acceptable for employees to tweet (both on and off the job). This is meant to prevent the posting of confidential or sensitive company information, as well as disparaging posts by employees. A policy cannot prevent an inappropriate tweet, but it can set a company standard on what is acceptable and what is not. This helps lower liability because at least there is a policy that outlines what is considered appropriate by the company.
Who manages your social media is extremely important. So many companies are trusting their social media to inexperienced interns or people low on the corporate ladder. The job is given to entry level positions because many companies don’t view the work as a worthwhile time investment for someone higher up in the company. The problem is, your social media is part of your public face. It is an integral part of your marketing and PR strategy, as well as your customer service. It is not something that should be trusted to someone who simply knows how to post on Twitter. Make sure that your social media is being overseen by a conscientious manager who understands the potential liability. This creates a good argument for using qualified outside social media managers and strategists, or hiring an internal specialist.
Will Twitter insurance be the next step in the business of social media? Most likely yes. Companies that have a high level of cultural influence will want to have the most amount of liability protection possible. However, will this kind of insurance be relevant for smaller businesses? Are people really suing because of bad tweets? How much damage can one do to a company’s reputation? When is a perceived liability truly a liability?