Organisations are insisting on new and more comprehensive clauses in their normal professional indemnity and directors & officers' (D&O) liability insurance policies to protect themselves from fallout from social media hate or unintentional corporate goof-ups.
Insurers say companies fear litigation and expenses in the event of incidents such as when a DDI World employee tweeted a hate message against Kashmiris, or when a Kotak Mahindra Bank employee justified the Kathua rape, reports Times of India.
Insurers are responding to the demand by offering specialised covers. For example, ICICI Lombard General Insurance sells media liability cover and Bajaj Allianz General Insurance markets cyber safety policies. These include social media liability.
ICICI Lombard General Insurance chief underwriting officer Sanjay Datta said, “Awareness has been increasing. For corporates, managing possible reputational risk and litigation is important. When the Satyam fraud issue happened, there was an immediate uptick in D&O policies.”
Mr Datta said that businesses need to buy policies that are comprehensive as they face a wide range of risks, such as inappropriate comments on social media and employee dissatisfaction.
However, state owned insurers say that existing policies can protect against social media fallout without the need for a special cover.
“Social media liability insurance may be a new concept with the rising popularity of LinkedIn, Twitter and Facebook. But it basically is a take-off on traditional covers,” said an official of United India Insurance.