Even a frivolous lawsuit for defamation or invasion of privacy could cost hundreds of thousands of dollars to defend
Gosh I love Facebook. I use it for so many things: maintaining relationships, stumping for political candidates, communicating with clients, communicating with my students at the university, advertising my consulting services and my business and just general farting around when I’m bored. I also love to blog, and I occasionally dabble on Twitter.
I cannot stress how important social media is for a business presence. You probably already know that, though. What I want to talk about today are some dangers of using social media.
Take, for example, Andrew and Neely Moldovan. These Texas newlyweds got perturbed with their wedding photographer, alleging she withheld their photographs for additional money. So they took to social media to tell everyone what a horrible person she was. As a result, the photographer’s business dried up, costing her thousands upon thousands of dollars in lost income.
The photographer sued the Moldovans and won a $1 million verdict against them for malicious defamation. As it turned out, the couple had exaggerated and even fabricated some of the facts regarding the transaction.
Lying about someone else is never a good idea. Doing so on social media is really dangerous. Defamation is the publication/dissemination of false information about a person or a business. The reason for the $1 million verdict against the Moldovans was that they said they were unaware of the photographer’s fees when the email chain between them indicated that they were indeed aware. Pretending they didn’t know was dishonest. And maliciously so.
Now, if what you say is truthful, it’s not defamation. As a matter of fact, truth is a complete defense to a defamation lawsuit. But that won’t stop someone from suing you if they feel wronged or injured by your words, no matter how truthful they are. Even if the lawsuit is frivolous and without merit, you still have to defend yourself, and defending yourself in a court of law is generally very expensive.
I know someone who blogged negatively about a business. Everything stated on the blog was absolutely true, but that did not stop the business from suing her for $6 million. Her lawyers ran up $75,000 in bills just preparing a response to the lawsuit and trying to negotiate with the other side. Had the case gone to trial, her legal bill could have easily been $250,000 or more.
I bring this up because it is common in business to want to convince your customers that you are better than your competitors. I strongly encourage you to do this without mentioning your competitors at all. Stay positive on social media. Toot your own horn, but don’t make comparisons between your business and your competitors. Even if what you say is 100% truthful, that won’t stop someone from taking legal action against you if they don’t like what you said.
Be careful about discussing competitors in any forum, including social media, telephone calls and live discussions. It’s just a dangerous activity that you need to avoid. Your mom also said, “If you don’t have something good to say about someone, don’t say anything.” That’s a good rule of thumb!
On a related note, be extremely careful about posting photographs on your social media accounts. Let’s suppose you snap a terrific photo of your employees waiting on customers and you decide it would look great on your Facebook page. The customer’s employer (or spouse, pastor, etc.) sees it. You could then be sued for invasion of privacy or release of confidential information. Make sure you get written permission before using anyone’s photos on social media.
In summary, before you post anything on social media, answer these questions: Is it absolutely truthful? Can you prove that it is? Will anyone be harmed by this post, whether a competitor, a customer or an employee? Read it in the snottiest possible tone of voice and realize that some people will take it that way. How will it be perceived?
Let’s suppose the worst case happens and someone sues you for defamation or invasion of privacy (or any number of other infractions such a copyright infringement, etc.). Your general liability insurance policy usually has coverage for these types of claims, which are referred to as “advertising and personal injury” claims. Not all policies are the same, but most general liability policies have this coverage.
If you aren’t sure, check with your insurance agent to make sure you have it, because it will pay for the defense and settlement of such claims should they occur.
Brenda Wells, Ph.D. is the Robert F. Bird Distinguished Professor of Risk and Insurance at East Carolina University and the owner of Risk Education Strategies. She has published numerous articles on the risk management implications of cannabis legalization and is a sought-after expert in the risk management and insurance field. She has received the Chartered Property Casualty Underwriter (CPCU) and Accredited Advisor in Insurance (AAI) designations. She can be contacted at firstname.lastname@example.org.