Does Your Product Liability Insurance Cover Social Media Risks?

Social media platforms like Facebook and Twitter are excellent ways to share information about your product and create a following of fans and brand evangelists. But they can also expose your small business to legal and regulatory risks. Your existing product liability insurance policy may not be tailored to deal with the emerging risks social media present.

Many insurance products, including product liability insurance, were designed before the advent of social media technology. And social networking sites represent an easy target for product liability claims, even facilitating the filing of faulty or dangerous product law suits.

For example, if your product has a chat room blog or message board where your company and customers can interact, you could inadvertently make a statement about your product’s effectiveness or safety that could later be interpreted as false, negligent, misleading or harmful by a plaintiff’s counsel.

The same holds true if you pay someone to write glowing reviews about your product on social media outlets. As the company owner, you could be sued for damages as a result. Even if a claim proves to be unfounded, without a properly written product liability insurance policy, you could still end up paying thousands of dollars to defend yourself.

Insurance companies are working to develop new products that will respond to specific social media risks. If you aren’t certain whether your policy covers product liability exposures associated with social media, review it for limitations and exclusions that would put you at risk. It may be possible to purchase an endorsement that will protect you. If you don’t currently have this coverage, you can get competitive quotes for product liability insurance on this website.

You can also take some proactive steps by establishing written policy for the use of social media by your company and its agents. It should include clear guidelines for screening user-generated content. Experts recommend that you have this policy written specifically for your company, products and industry, rather than adapting somebody else’s boilerplate policy. This will help demonstrate that you are serious about your social media use policy and its enforcement.

Please read our other articles in this series, which discuss professional liability and social media risks and EPLI and social media risks.