Reviewing past articles that I have written, I came across a discussion with Andrew Taylor of Chubb Insurance and an article he provided to AFTA in November 2011. Back then social media was becoming a very popular topic of discussion especially in relation to “content”.
Now nearly a decade later it is impossible to imagine life without this everyday staple.
For better or worse, social media is now part of our life and more than ever, for the world of travel. It provides you with opportunities to share stories from around the globe, to connect the world with your customers, with your neighbours and even your closest friends instantly. However, with all modern developments, there are disadvantages and risks.
In 2011 when we talked about the risk of using social media, the concept of “fake news” did not exist. Fake reviews were uncommon – trolling was not part of our vocabulary. The speed at which information is now spread via all the networking platforms, whether it is real or not, is truly astonishing.
The consequence of this speed can be seen in the latest Product Liability Insurance issue to affect the Travel Industry – think of Boeing’s potential problems with their latest aircraft! The apparent significant defects with the 737 Max 8 could permanently damage the company financially as a result of a combination of liability claims, recall costs, business interruption and, most importantly, damage to Boeing’s reputation.
What was surprising about the case was the speed of the worldwide reaction.
Aviation accident investigations proceed slowly, with analysis of the evidence and careful consideration of the recommendations. It is a process that has helped to reduce risks substantially in the past.
But in the case of the 737 Max 8, the concerns were raised via social media and views (whether based on fact or not) were formed within a matter of days. The decision to ground the planes whether right or wrong highlights how the pressure social media has increased exponentially.
When something goes wrong with your business it is crucial that a sound Social Media Policy is followed with examples set by management and built into the culture of your company – this is the case if you have two employees or two thousand employees. Managing any issue that can impact your bottom line can be contained and managed with the correct (and quick) response to such circumstances.
It is interesting to look at the recommendations made by Andrew Taylor in 2011 – those risk management tools still hold true today – his three main points were:
1) A Social Media Policy
Do you have one? To guide staff in their use of social media, set out clearly the expectations of the company regarding usage and highlight the potential dangers to employees and the company. Social media has not altered the fact that potential clients may hear or read negative comments about any business.
The growth and accessibility to information means that it's far easier to have these comments heard or seen to a much wider audience. Your business embraced social media to gain greater access to potential customers but it also raises the risk of a public relations disaster for any company.
2) Privacy and Data Protection
If you are collecting client data, the loss of this data or even worse, the release of this data to the world, could cause serious damage or embarrassment to your clients and exposure to legal action being taken against you. Ensuring that your business has correct password controls to access operating systems, maintain good anti-virus software and backs-up files regularly does mitigate this risk. Firewalls are not impenetrable so your client data may be at risk.
This is where consideration needs to be given to other risk management tools like third-party liability insurance. There are now more insurance options that offer a range of cover and your Broker can assist in guiding you through the choices available. Cyber Insurance cover will help reduce your costs should a serious breach occur to your systems.
3) Intellectual Property
The ease with which trademarks and logos can be copied or even photos and music clips uploaded through numerous electronic devices means your company’s IP is at risk but more importantly, you or your staff may unintentionally infringe on a third party’s intellectual property. Intellectual Property claims are costly to defend and can be very distracting to your business.
The global nature of online information means the exposure is now worldwide. A social media policy can help mitigate this exposure when the policy does explain a usage process of a clearance procedure for ensuring the information you upload is rightfully yours.
While there are risks, there are also rewards in using social media to foster relationships, old and new, with your customer base and promote your company’s brand.
If you believe that this issue is relevant to your business, please feel free to contact Rebecca Fleming, Account Manager of our Travel Industry Division at Gow-Gates Insurance Brokers on
(02) 8267 9919 or email@example.com to discuss your circumstances or to obtain a quotation for Cyber & Privacy Protection Insurance.