Tag Archives: social media strategy

Social Media And The Insurance Implications

Most marketing and communication departments know all too well that social media and social networking sites are a treasure trove of opportunity for elevating your personal or corporate brand. Employees use social media for personal use, but also use it as a forum to talk about their boss, their company, their products, their problems and whatever else is on their mind. There are 200 plus social media sites in English alone, Facebook recently reached one billion users, and Twitter puts out more than 170 million tweets per day. That is a lot of free advertising!

However, what many businesses fail to remember is that, despite all of the positive aspects social media brings to a firm's marketing, communication, and sales efforts, it's also ripe with opportunity to damage their brand and cause a financial loss. While it's free marketing, it's also a lot of unedited content being published online that could be about your business, about your products, or attributed to you. Could a competitor feel that your employees are slandering their people or products? Could a competitor gain inside information about your organization? Could an employee divulge information that could get them fired? Could you or your employees inadvertently offend prospects and clients? In short, yes. As social media use continues to evolve and grow, it's important to consider this exposure to your organization.

Using Social Media To Generate Business Leads
All of this can be scary, but you can't ignore the great opportunities created by social media. Any organization not taking advantage of social media sites is signaling that it is not evolving with the times, and there is nothing close to matching the immediacy of broadcasting your news through social networking sites. A well-crafted social media strategy can generate a lot of interest in your product or services and drive traffic to your website where more specific information can be provided.

“In time, the proper execution of a focused social media strategy is an efficient means of staying in front of prospects. When the prospect has a business problem, your positioning as a credible, knowledgeable resource can help you get in the door and, hopefully, close the deal,” says Randy Stoloff, Director of Marketing and Social Media at AmWINS Group Benefits in Warwick, Rhode Island.

It is critical to have all content reviewed by someone within your organization that can be responsible for stopping improper content from being released. It's also important to review applicable insurance policies such as a website media policy or cyberliability policy to be sure social media activities are covered.

Using Social Media For Crisis Response
Imagine a time down the road when your best customers follow your social media feed and you need to get news out in a hurry about something that could cause your most prized customers harm. Assuming you have or hire qualified public relations professionals that can help you craft the proper way to phrase the announcement, you can get important news out immediately to show your concern for your customers and for transparency. Social media provides the most immediate way to communicate to your target audience. There are many insurance products currently available that assist with handling the public relations aspect of a crisis response. Having your social media presence established prior to a crisis will help you deal with the crisis in a targeted fashion.

Can Social Media Sites Be A Network Security Risk?
Besides the potential for hackers to use employee information on social media sites to figure out passwords, the sites can also be used to transmit computer viruses and other dangerous malware. As a result, many corporations block employee access to social networking sites. If the corporation has a cyberliability insurance policy in place, be sure it addresses security issues emanating from social media. The coverage may be limited to networks owned or controlled by the corporation.

Should I Address Social Media In My Employee Handbook?
This is a topic that requires legal counsel with experience in employment law as well as social media. It makes sense as a business owner to establish a guideline on what social media activities are permissible for employees, but it must be carefully worded. The National Labor Relations Board has published guidelines that may help. Most companies work very hard to establish a professional image and reputation. Employees often mistakenly think that commenting in social networking sites is somehow exempt from personal responsibility. The press is full of examples of disgruntled employees commenting on working conditions, complaining about their managers or coworkers, or commenting on confidential internal activities. Employees have been terminated for their conduct and they've sued for wrongful termination. You are likely to find coverage for the wrongful termination claims on your employment practices liability (EPL) insurance policy. Working with a professional is critical for navigating this minefield. You may not be able to avoid the litigation, but you can lay the groundwork for an effective defense.

Do I Need A Social Media Component In My Employment Contracts For My Executives?
Your top executives can also make mistakes using social media. Sensitive information can be leaked out accidentally by people who see the most sensitive information. Similar to non-executive employees, managers who have been terminated due to their social media activities have sued their employers for wrongful termination. Again, look to an EPL policy for coverage for that type of claim.

Should I Review The Social Media Content Posted By Job Applicants?
Many states have enacted laws barring employers from requesting full access to an applicant's social media profile. We have all heard stories about a prospective employer seeing improper pictures or comments by the applicant which influence the decision to hire or not hire them. Some employers have taken it one step further and requested login credentials from job applicants in order to see all the content they have posted. It seems like an obvious invasion of privacy, so laws are being written to protect the rights of job seekers. The claims that can arise from this scenario could have coverage apply under the “wrongful failure to hire” coverage on an employment practices policy, as well as an “invasion of privacy” policy as part of a cyberliability policy.

Scared Yet?
There are reasons to be concerned, but the opportunities need to be investigated with a proper foundation of preparation. It is also important to remember that there are insurance products available to help protect you after missteps. If you have an employment practices liability policy, you likely have some protection from wrongful termination claims and invasion of privacy claims brought by your employees. If you have an internet media or cyberliability policy, you could have remedies for allegations of libel, slander, defamation and invasion of privacy claims brought by other parties. A strong cyberliability policy will have protection from breach of security claims if hackers use social media to access your computer network for malicious purposes. It's possible that other insurance products can offer assistance as well. AmWINS represents multiple insurers with all of these insurance products and can help you select the proper coverage for you and your clients.

Flo Won't Handle Your File: Claims in the Social Media Age

Viral phenomena on the Internet more frequently concern “Cats that Look like Hitler” or racy photos of Prince Harry cavorting in Las Vegas.

Insurance claims rarely go viral on social media, but that changed recently with a controversial underinsured motorist claim involving Progressive Insurance Company. You can find background on the case here.

The sad facts here are straightforward. Progressive Insurance Company policyholder Katie Fisher died in a 2010 automobile crash in Maryland. Allegedly, the other driver ran a red light, though there was a dispute as to who had the green light and the right-of-way. The driver that struck Katie’s vehicle was under-insured. The good news: Katie had bought underinsured motorist coverage (UIM).

The bad news: to collect, Katie’s family had to sue the other driver for negligence to force Progressive to pay. However, when the family sued the other driver, Progressive’s attorneys associated with the other driver’s attorneys to defend the liability claim. As a result, the deceased’s brother went viral in social media rounds, complaining that Progressive used premium dollars to defend his sister’s killer in court. That makes for an arresting headline.

This claim illustrates the importance of an insurance company being attuned to social media and having a social media policy. Of course, here Progressive did not stick its head in the sand. It did not ignore the social media buzz surrounding its handling of the case. Apparently, it responded but responded in a way perceived as tone-deaf.

Progressive In A Lose-Lose Situation?
Maybe Progressive Insurance Company was in a no-win situation. If it ignored the social media banter about its stance, consumers would accuse it of insensitivity. It entered the dialogue to justify its actions. In so doing, people accused it of being tone-deaf to consumer sensitivities. I don’t know what response Progressive could have launched on social media that would have satisfied its critics.

This vignette underscores how little people understand what they buy when purchasing underinsured motorist coverage. Buying underinsured motorist coverage essentially risks putting you at odds with your own insurance company. In such a claim, your own insurance company is incentivized to show that you in fact were at fault for the accident and/or that your injuries were not the result of the negligence of an underinsured driver. People assume that the insurance company to whom they paid their premiums will always be on their side. Typically, this is the case. Typically, this is the alignment of interests.

In underinsured motorist coverage and claims, however, “typical” doesn’t necessarily apply. Here, interests are aligned differently. Just because you pay your insurance company for the coverage doesn’t mean that — in a claim involving an underinsured adverse driver — your insurance company is going to act all soft and fuzzy.

Of course, insurance companies would not effectively market and sell underinsured motorist coverage if they made this reality explicit and spotlighted it in the sales process. People don’t think it through. Nobody really believes deep down they will be hurt due to the fault of an underinsured driver. If they pay for the coverage, perhaps they pay for it begrudgingly at best.

Policyholder Ignorance About Underinsured Motorist Coverage
So, those who say “Shame on Progressive” for its stance adverse to its own policyholder could add, “Shame on the policyholder” for not realizing the dynamics in underinsured motorist claims. Of course, it sounds callous to be lecturing a family on the dynamics of claims-handling when they have lost their daughter in a fatal car accident.

Further, there was a reasonable question of fact as to who had the right-of-way. Should Progressive and its adjusters have ignored evidence that the deceased may have been at fault in order to pay the claim? It’s difficult to fault Progressive’s adjusters here, as tempting as it may be to do so. There was a legitimate dispute as to who had the right-of-way and who ran the red light. Was Progressive wrong for exercising its legal right to seek a judicial determination of liability?

Personally, I don’t think so.

Nevertheless, insurance companies now face not just bad faith risks over how their claim department handles or mishandles an automobile loss. They also face reputational risks if disgruntled consumers take to Twitter, Facebook, blogs, Tumblr, etc. to air their gripes.

Internet Megaphones
The Internet and social media provides a bully pulpit and cyberspace megaphone for anyone who has a beef, whether that complaint is justified or specious. On the other hand, since everyone now has an electronic megaphone via the Internet, World Wide Web and social media, the cacophony of complaints can create a “white noise” effect that makes any one complaint difficult to stand out. This complaint did stand out, though, and got widespread media play.

While it is tempting to say “No comment” or “We won’t try our case in the media,” insurance companies — like other businesses — cannot take an ostrich approach and stick their heads in the proverbial sand.

The takeaways and lessons from this go beyond Progressive Insurance Company. Katie Fisher’s case illustrates that in the 21st century:

  • insurance companies must have social media policies,
  • they must monitor social media, and
  • they must be able to articulate a concise yet compelling message to an often skeptical audience.

It’s not enough to handle the claim conscientiously.

It’s not enough to handle it in accord with the policy conditions.

It’s not enough to comply with state insurance department regulations.

It’s not enough to believe that you acted in good faith.

If you have an under-insured motorist claim, you must realize that your adjuster will not be perky Flo from the TV commercials.

Insurers Need Social Media Strategy
This case study also spotlights the need for insurance companies to have a refined social media strategy. That goes beyond grappling with questions like, “Should we be on Facebook or Twitter?” or, “Should we have a blog?”

Sorry — those questions are so 2010. That no longer cuts it as a coherent social media strategy.

It’s no longer enough to have a digital footprint in the social media world. The content of what companies put out on social media is vital, scrutinized, and should promote their brand. Content is king.

Moreover, insurance companies must have institutionalized disciplines to monitor what is being said about them on social media so they can respond quickly and persuasively. The consumer conversation about your service and policies is going on — with you or without you. It is best that it goes on with you. It’s best that you have an opportunity to be aware of customer service firestorms brewing so that you have the opportunity to squelch them, address them and nip them in the bud.

You may have to justify your steps in the court of public opinion through social media or suffer the consequences of a public relations black eye if you hunker down and go incommunicado.

As this case study shows, adjusters are sometimes damned if they do and damned if they don’t.

Pay the claim in the face of conflicting evidence, and be second-guessed for poor decision-making by higher-ups. Contest the claim and align yourself with the other driver’s insurance company, and you get criticized in the court of public opinion for callousness.

No one promised adjusters a rose garden and they certainly don’t get to operate in one in the age of viral posts and social media!