By STEVE YAHN, who has written for and edited national publications for more than 30 years
1. Draft a company social media policy.
Michelle Sherman of Sheppard Mullin Richter & Hampton advised firms to consult with their corporate attorney.
"I would hope one of the things the attorney would say is, 'Well, I've read about social media policies, and they are not that difficult to put together,' " she said.
Such policies can be two or three pages long and don't have to be loaded with details.
"The company will want its employees to be aware of the social media dos and don'ts. The management and Web 2.0 marketing and technical people should also be well informed," she added.
2. Have a clear understanding of what the company's online advertisers are doing.
"The way these (social media) laws are advancing, or the way it sounds like people are thinking about them, it would seem that it would be in an advertiser's or a company's best interest to start a practice now of being open in terms of what personal information they are collecting and how they are using it or contemplating using it," said Daren Orzechowski of White & Case. "It's definitely an area we're watching."
3. Carefully define your coverage strategy. ThinkRisk's Chad Milton pointed out two key parts of specialty media coverages. One is what activity is covered, the broader the definition the better. The other key part is covered perils.
"Here you want to see a broad statement of media perils--libel, invasion of privacy, copyright infringement, trademark infringements, theft or idea infringement, rights of privacy and those kinds of things," Milton said.
4. Insist that your broker is actively looking out for you.
"One issue we see is that many brokers don't do a careful enough job of fighting for their clients or even of advising them in the social media process," said Robert Chesler of Lowenstein Sandler. "A lot of insureds, for example, are surprised to find out they no longer have trademark coverage, which they had 10 years ago."
Also make sure insurance brokers are informing you about any new exclusion and what types of coverage might be available to fill any gaps, he said.
5. A social media policy can help protect your brand.
"It only makes sense that a company does not want an employee deciding to do something on his own that will hurt the brand or public image of the company because the employee thinks it is funny," Sherman said. "What an employee may think is humorous in a social media setting can go viral very quickly, and be damaging to the brand of the company."
6. Protect your trade secrets. Sherman also noted that employees may fail to appreciate the legal consequences of discussing a new product they are helping to develop on social media sites.
"The employee's online discussion may fall within the area of something that could compromise the company being able to assert its trade secret rights," she explained.
Take nonmedia companies using new forms of communication and add the unknowns about the liability principles that apply--privacy and intellectual property, for instance. Then mix in uncertainty about whether standard wording in insurance coverages will respond to those liabilities.
Looking at this big picture, Jay Ward Brown at Levine Sullivan Koch & Schulz called it "a sort of a combustible mix"
"It's an area where risk managers or general counsels or (chief operating officers) of nonmedia companies really need to do some self-education," he concluded.
June 1, 2011
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