The CBC heard from Malcolm Randles, an underwriter for Kiln, a subsidiary of Lloyd's of London, that Canadian insurance brokers are increasingly looking for an offering of this kind to offer their clients and that Kiln is proceding with the development of a specific product just for this particlular risk.
Corporations using social media run the risk of lawsuits for defamation of character, privacy issues and for intellectual property transgressions.
Eric Dolden, a Vancouver-based insurance lawyer with Dolden Wallace Folick LLP, told cbc.ca, that the primary reason for the liability risk is because companies are not establishing clear written policies for social networking.
While the current demand for social media insurance is largely for corporations, Dolden feels that we are about 5 years away from some form of personal insurance for individuals using social media.
Someone that posts any negative comments about their employer or their place of work could end up on the receiving end of a lawsuit brought on by the their employer or company that was the subject of the post, Dolden added.
Studies have indicated that 76% of the lawsuits arising from internet activity allege libel and look to recoup damages caused by “electronic” defamatory statements.
(Editor’s Note: In order to better educate your clients relative to the issues raised in this article, be sure and consult with a trusted Social Media expert – as well as your compliance department.)
