With great power comes great responsibility

From Facebook and Twitter through to Instagram and Snapchat, social media allows celebrities, influencers and public figures to effortlessly reach out to their audiences – wherever they are in the world and at whatever time of day.

But all it takes is an ill-judged tweet or promotional post and someone can quickly find themselves deep in hot water. As the accusations fly and the legal fees escalate, Hiscox is not only bringing financial protection but also some much-needed clarity for those in the public eye about social media protocol.

Time to take ownership

Tyler Peterson, Senior Media Underwriter for Hiscox, gives some background. ‘We have been insuring companies in the media and creative industries for well over 20 years,’ she says. ‘One of the things that has emerged is that these companies could held liable for mistakes that their commentators, guest writers or influencers say or post out to the world.

‘To some extent, they’re prepared to take on that responsibility if the contributor is high profile but, in some cases, they would like to transfer that legal liability and risk on to the individual.’

As Tyler notes, in the case of influencers and influencer marketing, it could be a teenager in their bedroom making a YouTube video. So how do you impose standard contractual liability and terms on a 19-year-old who might not necessarily have the financial means?

‘For an influencer to suddenly discover they are under investigation by the Competitions and Markets Authority (CMA) can have serious financial implications. It could mean costs of around £50,000 for simply hiring a lawyer to put forward their case to the CMA, and if a ruling goes against them they could incur further fines.’

To help tackle these issues, Hiscox has introduced Influencer and Public Figure Protection. ‘We created a policy that addressed all those standard content-related exposures from our experience in the media and insurance industry, but we’ve addressed some of the newer, evolving risks as well.’

To put those exposures into context, Tyler identifies four scenarios where anyone –from the head of an FTSE 100 company through to an agency or micro-influencer – could be exposed and need to seek legal counsel.

1. The CEO of a major corporation who talked about a competitor at an after-dinner speech

‘When we were doing our research a lot of people said ‘I won’t - or my client - wouldn’t ever say something defamatory. It’s not something that I’m concerned about.

‘But if you take the example of somebody who is just telling story at an event and they divulge a piece of information or they say something that might be a little off-colour about a competitor, they might not think it’s a defamatory remark or that it will even leave the room, but we know that very little stays behind closed doors.’

2. The sports star who accidentally tweeted confidential information about his teammates

‘A couple of months ago a US sports coach posted salary information about his team. Alternatively, you might have a situation where somebody tweets about an injury, and that information could damage a player’s reputation.

3. The high-profile actor in a biscuit commercial seen eating a competitor’s brand in public

‘We’ve had this scenario happen to clients where they’ve been paid to promote a brand and during the promotional period have ended up being photographed with a rival brand. That person will face a breach of contract claim. In many cases, the brand works with an ad agency and the agency chooses the talent, so you have a chain of contractual obligations.’

To give an example from last year, Manchester United midfielder Marouane Fellaini’s boot deal with New Balance was terminated early after he publicly criticised the brand. Had New Balance also sued for breach of contract, and Fellanini had this policy in place, the cover would have responded to defend Fellaini against the claim by New Balance.

4. The star who posted a funny picture on Facebook they didn’t own

‘In most cases, when somebody posts a photo online they don’t consider who owns the copyright,’ says Tyler. She cites the example of Bruno Mars, who faced legal action by a photographer after he posted a photo online that she took of him when he was a child.

Tyler adds, ‘If you think about the gaming community on YouTube, unless the developer has given the gamer permission to use their game on their channel technically they are streaming a video game and that is a violation of IP law.

‘That’s an evolving space because developers seem to be fine if the game is getting exposure and publicity from the YouTubers. But the minute the YouTubers start saying something that doesn’t align with the developers’ ethics or values they could send out a cease and desist letter.’

Looking beyond defamation

Along with covering traditional lawsuits like defamation, influencers or public figures will be covered if a suit for breach of contract arises from a claim relating to the quality of their promotion or endorsement when it’s brought by their client. The influencer or public figure will also be covered if they cause the brand or agency to be sued and the policy indemnifies the group throughout the duration of that claim.

Tyler adds, ‘In the digital world, the ad agency will often put into the contract “you, the influencer, are responsible for ensuring that the promotional advertising on your social media feed is properly disclosed in accordance to law”.

‘If the influencer doesn’t do that and it brings the brand into disrepute, the ASA usually issues a ruling against the brand which, in turn, will bring that breach of contract claim against the influencer. This is the digital side of contractual liability that we’ll cover.’

‘From an underwriting perspective our goal is to make sure we choose the right people (to cover) and therefore we know there is this added level of protection, but we also need to support the up and coming talent who are going to have learning curves.’

Hiscox is the first insurance company to market an insurance policy tailored for those living their lives in the public eye – therefore bringing much-needed stability and clarity to the constantly evolving relationship between the law and the internet.

Find out more about Influencer and Public Figure Protection.