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Knowing the Online Risks

Limiting liability for employee use of social networking websites

Social networking has evolved as common practice both personally and professionally. Today, we Tweet, Skype, Facebook and MySpace.

The question this creates is: what does this mean for a business owner looking to minimize risk among his employees? Can a business be held liable for social networking done at work? What can a business do to limit any exposure?

Possible sources of liability related to social networking primarily revolve around libel, defined by Webster's online dictionary as "defamation of a person by written or representational means."

An employee who is social networking on company time or about company business may open an employer to this type of legal exposure. This may be especially true if a company has an internal strategy which includes social networking as part of its marketing efforts. One example of this kind of liability is when a sales person comments to a potential client about a competitor by posting something like, "Company X never gets its product out on time."

According to socialnetworking.lovetoknow.com, Section 230 of the Communications Decency Act covers legal issues such as defamation and illegal content. The website goes on to warn employers that "this section of the Communications Decency Act doesn't protect users as much as it protects the social networking service itself from being served in a liability or defamation lawsuit."

The website also reads that "a good rule of thumb when it comes to posting on a social networking site and legal issues is that once something in posted in one place, there is no guarantee it will ever be removed from the growing body of Internet content. So if you don't want it online forever, don't post it."

What can a business do to limit any exposure from employee activity on social networking websites? Always a good start is to have clear policies and procedures in place regarding expected behaviors of employees while engaging in work activities. A company may decide that while their employees are at work, LinkedIn.com is the only acceptable social network for communication and networking.

Another source of protection for the company may be found in a company's general liability coverage. It is also important to discuss with your insurance agent to confirm personal and advertising injury coverage has not been excluded based on your specific type of business.

It is clear that social networking creates great opportunities as well as some legal pitfalls. Connect with your team of trusted advisors to confirm you are doing everything in your power to manage your exposure.

Tony Johnson is an accredited advisor in insurance with Davidson Insurance in Vancouver. He can be reached at 360.514.9550 or Tony@Davidsoninsurance.com.

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