Are Your Social Media Channels a Professional Indemnity Risk?

Are Your Social Media Channels a Professional Indemnity Risk?

According to 2018 research conducted by Hootsuite and We Are Social, 3.5 million people in New Zealand are active social media users and they spend an average of 1 hour and 53 minutes on social media networks each day. New Zealand businesses are following suit and becoming active on social media, aware that it’s the ideal communication channel to reach people using much smaller budgets in new and innovative ways.

Social media is becoming an increasingly common way for businesses to promote their   products and services to  clients   and  potential  clients.  It also gives businesses a new and innovative way to interact with their audience, which, unfortunately has brought with it increased exposure to new risks that business owners should be aware of.

Business owners and employees are under increased scrutiny as the  public monitor their behaviour on Social Media platforms.  Statements made by management and employees on the business account are often assumed to be relevant to the employer, and the public want to hold businesses accountable for their online actions. As such, more liability claims are being made against businesses based on what they are posting on their social channels.


Increased Risks on Social Media

Most of the risks presented by Social Media fall under the umbrella of Professional Indemnity.  They are not necessarily new concepts, however the risk is increased due to the easier spread of information through Social platforms. For example:

Companies have been found liable for publishing misleading and deceptive statements on their Facebook  and Twitter pages. This was found to be a breach of consumer protection legislation.

  • Publishing confidential information (whether deliberate  or  accidental) can breach privacy laws.
  • In some cases, employers have terminated staff employment as a direct result of things they have posted on their own social media accounts. This can lead to employment related claims such as discrimination, harassment or unfair dismissal.
  • Damage to the business brand as a result of the quick Social sharing of information about a product or service failure.
  • Infringing copyright by sharing content that is protected by copyright.
  • Risk of defamation.

If your business is currently active on Social Media, or considering using Social Media, it is vital to be aware of these increased risks.  The first step in managing your risk in this area is to devise and implement strict Social Media policies for the business account(s)  as well as for employees.  You should also look into your Professional Indemnity Insurance so that you know exactly what you’re covered for.

Speak to your Insurance Advisor for more information.


Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.

The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.

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