Should Your Business Insurance Cover Social Media Risks?
Facebook, Instagram, LinkedIn and other social platforms have become part of everyday business for many Tasmanian businesses. But if something goes wrong on social media, have you considered whether your business insurance provides the protection you expect?
For businesses looking for the best Business Insurance Tasmania can provide, social media may not immediately spring to mind as something to discuss with an insurance broker.
However, the risks associated with using it can potentially affect your business financially, legally and reputationally.
When a Social Media Problem Becomes a Business Problem
Imagine someone gains access to your business Facebook account and starts sending fraudulent messages to customers. Or a fake account is created using your business name and branding. Perhaps an employee accidentally publishes confidential information or content is posted that leads to a complaint or claim.
These aren’t simply social media inconveniences. Depending on what happens, they could result in financial loss, privacy issues, reputational damage or potential liability.
The Australian Signals Directorate warns that social media and messaging services can create security and privacy risks for organisations. It recommends measures including multi-factor authentication, controlling account access and avoiding shared login credentials.
Australian Signals Directorate — Security tips for social media and messaging services
Does Your Existing Insurance Respond?
This is where things can become more complicated.
There isn’t necessarily a single insurance policy called “social media insurance”. Depending on the incident and the wording of your policies, different types of insurance may potentially become relevant.
Cyber insurance, for example, may provide protection for certain cyber incidents, while other circumstances could involve professional indemnity, management liability or another form of business insurance.
However, policies differ considerably in what they cover, their exclusions, conditions and limits. Simply having business or cyber insurance doesn’t automatically mean every problem involving social media will be covered.
That’s why it is important to understand your particular policy rather than assume protection exists.
Think About How Your Business Uses Social Media
The level of risk can also depend on how important social media is to your business.
If you occasionally publish a Facebook post, your exposure may be quite different from a business that takes customer enquiries through Messenger, advertises extensively through social media, manages customer information online or relies heavily on social platforms to generate sales.
It is worth considering who has access to your accounts, what information passes through them and what the consequences could be if an account was compromised or unavailable.
Reducing the Risk Still Matters
Insurance is only one part of protecting your business.
Simple precautions such as enabling multi-factor authentication, limiting account access to people who genuinely need it, removing access when employees leave and avoiding shared passwords can help reduce the likelihood of an incident occurring in the first place.
These precautions can be particularly important when several employees or outside contractors have access to your business accounts.
Should You Discuss Social Media With Your Insurance Broker?
If social media plays a meaningful role in your business, the answer is yes.
You don’t necessarily need another insurance policy simply because your business has a Facebook or LinkedIn account. But your broker should understand how your business operates and the risks that come with those activities.
A conversation with your Local Insurance Broker in Tasmania can help identify potential gaps, explain which existing policies may respond to particular incidents and determine whether your current protection remains appropriate.
Social media has changed considerably over the past few years, and so have the ways businesses use it. Your insurance arrangements need to reflect the business you’re operating today — including the risks that increasingly exist online.
Remember, this article is general in nature and doesn’t take into account your specific objectives, financial situation, or needs.
For advice tailored to your circumstances, have a chat with us at
RSM Tasmania Insurance Brokers Hobart.
Talk to Roger Hosie and stay ahead with RSM Tasmania’s insights.
Call (03) 6244 7854 or email Roger at .
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