Perils of the digital world

News >> Risk Management

Perils of the digital world

Business is increasingly engaging in social media not just for marketing, but also to interact with their customers and employees. It has been difficult for most underwriters to keep up.

The risks of defamation and copyright infringement previously the domain of print publishers have now become part of the on-line media exposures, along with issues such as cyber crime and breach of confidentiality risks.

Our legal system has also struggled to keep up. The Australian Government is watching with interest how Europe and the USA deals with issues of social media and threats to consumers. Website owners in some circumstances, carry additional risks such as having a duty of care to their users.  An individual can now be served notice via their Facebook profile if they cannot be physically located; and in Australia, individual profile pages are able to be used as evidence before a court.

With websites and alternative methods of content delivery such as mobile SMS, there is now a greater range of exposures. Many clients are now opting for ‘multimedia’ liability policies rather than the traditional defamation policies which only covered a smaller range of risks based on one simple form of delivery. Many of these clients host discussion boards or social networking sites which can be areas of risk for the host or the clients who post on third-party sites.

Insurers are now starting to offer products that include broader cover for the various risks associated with content creation and dissemination including with the use of new media.

These risks are not only applicable to the large operators like newspapers and television stations, but also to any platform using the internet. It also makes a company’s exposure global. Complaints can come from anywhere in the world regardless of the size of the company.

Whenever you are putting yourself out there using new communication technologies like Facebook or Twitter, there is likely to be some legal issues that will potentially arise for the individual involved . Even more so for employers if you are representing their workplace.

Engaging in social media involves certain legal risks. Companies without a culture of using social media to engage with their employees and customers will increasingly be disadvantaged as it is a very effective way to manage customer relationships.  Customers increasingly consumers are expecting it too,

Both employers and employees are potentially liable for defamation and copyright infringement, and they need to understand these risks. The best advice is to provide training and education.

Employers need to have a good social media policy.  They need to ensure that their employees follow these social media policies at all times.

If a company engages in social media, risks are immediately reduced if they have processes in place that fit in with existing internet cultural norms and practices. The key also is employing people who understand social media.

There are multimedia liability policies that cover traditional broadcasting and publishing (like TV and radio stations and newspapers) as well as graphic artists and online content providers creating content that will cover various jurisdictions. They are easily tailored to different types of businesses such as Advertising agencies who, for example, will have different needs to a documentary producer.

It is not just for defamation but also for Insured’s that may have inadvertently used someone else’s intellectual property such as a Graphic Designer or an E-book creator. It can cover invasion of privacy if IT systems are hacked into and so on.

Facebook and Twitter and similar can be covered. A business that is regulating its sites and its social media participation well and is taking measurable steps to manage its risk is more likely to obtain insurance.

Insurers will consider the risk management of any sites that they insure, and try to get a feel for the philosophy of the people who own the site to make sure they’re not trying to elicit inflammatory responses to get people involved.

Before insuring websites or multimedia organisations, underwriters will investigate the ownership, what lawyers are used and any disclaimers that may be issued along with the processes and systems in place. They also consider the experience and knowledge of the editors or journalists who might provide content.

Insurers are interested in insuring any client that they feel acts responsibly. They will try to work out what the risks are and how the client is trying to mitigate those risks. Implementing a good Risk Management system to these risks including transferring some of these to Insurers will offer good protection for your company.

If you need help on these risks, do not hesitate to contact us at CPR Insurance Services. We are experts who just may save you!


Last changed: Mar 12 2012 at 12:51 PM


  1. None Found

Add Comment

Latest News

Robert Cooper - one of 100 faces of small business

This week it was announced as part of Small Business Week,  that Robert has been named one of the 100 faces of small business for a State Government promotion on the great value that small businesses play in the State of Queensland.

You can see Robert's entry here:

It is the third accolade for CPR Insurance Services in a month and after seven and a half years in business is a real pep up for the company.

For Robert, it is the culmination of many years experience, becoming well qualified, experiencing the highs and lows of a career and always wanting to contribute to his community. Sometimes, these things just come together and you receive recognition for your efforts.

Robert says that there is no doubt that starting your own business is a huge challenge, but with the right research and planning, the right people around you and a good set of values that you apply to the vision of the company, you have a very good chance of making it all succeed.

Robert says he is lucky. He has a strong supportive Wife, Mandy, who is also part of the business, along with efficient and hard working staff such as Julia McLauchlan and Aidan Harmer who are building up their own skills in a learning environment. 

However, the most important and most supportive people for CPR Insurance Services are our clients who have stuck by us and supported us over the past seven years. Our focus remains on providing the best possible service we can and always acting in their best interests. To all our clients, we say thank you!

read more

CPR Insurance wins Brokerage of the year

CPR Insurance Services picked up the award for the Best Brokerage (1-5 staff) in Australia, last Friday Night (4th May 2018) at the Insurance Business Magazine Awards held at the Westin in Sydney.

Judging came from various parts of the industry. It is a great honour to be recognised for our hard work and particular Business values we follow. A full list of winners is listed here.

Success comes from having great staff, and we thank Aidan Harmer and Julia McLauchlan as important support staff for helping us win such an award.

CPR Insurance has been in operation for more than 7 years now and is only successful because of the wonderful support from our staff, insurers and most importantly, our fantastic clients who put their faith and trust into our company to be their Risk Advisers and Brokers. 

Thank you to all.

read more