Social media risks for your business

For many businesses, social media has become one of the most valuable marketing channels available — and one of the least understood risk exposures.

Social media does come with a genuine set of risks. In its Annual Cyber Threat Report 2024–25, the Australian Signals Directorate's Australian Cyber Security Centre reported that ransomware attacks and data breaches have been increasing in frequency, with the average self-reported cost of cybercrime for businesses rising to $80,850 per report. Social media risk management has become a domain of expertise in its own right.

When defamation, slander, or negative publicity are involved, a single misstep on social media can do lasting damage to a brand — the kind that takes far more time and effort to repair than to avoid in the first place. That risk is worth taking seriously, and it's also one of the more manageable ones, provided the right practices are in place from the outset.

Basic security practices and mitigation strategies can be adopted in order to manage those risks:

1. Social media policies and guidelines

Have a clear process as to who is responsible for posting on social media. Have guidelines as to what messages are appropriate to feature on social media and tone/voice to be used. This process should also provide guidance on how often social media is monitored and responded to and especially how to respond to negative comments.

2. Employee training

Human error remains one of the most common contributors to cybersecurity incidents, and staff training is consistently highlighted by cyber authorities as one of the most effective ways to reduce this risk. In today's busy world, it is all too easy for an employee to accidentally expose the company to threats online. Ensuring that your employees are involved in relevant training involving social media is key. Have training sessions around how to identify and avoid scams, attacks, and other security threats; who to notify, and how to respond if a social media security concern arises.

3. Professional use and personal use of social media

Always be wary of the language you use on social media. When deciding on what social channels to use for your business take into account the needs of the organisation, not the owner's/manager's personal views of social media. Also, remember that nothing on social media is really private. It is important to take the time to think through a message before sharing it on social media.

Regardless of all precautionary measures, insurance is always recommended as an extra layer of protection. Insurance has a role to play, but it is important to understand how cover works in relation to social media risks because the protection insurance provides has limitations.

So, what can insurance cover?

If you have been accused of defamation as a result of comments you have made on social media in your capacity working for a business, cover may be available within public and product liability insurance, professional indemnity insurance, as well as certain other policies.

Public and product liability, as well as professional indemnity insurance, may also help cover legal costs required in defending yourself in court; in the instance where you've been a victim of keyboard warriors on social media. That being said, policies are unlikely to cover for threats such as someone "simply" trolling your business but rather provide cover for the loss of a major customer contract. For this to happen, the trolling or event would likely need to be defined as a crisis event.

The digital world isn't 100% secure and even with the best antivirus software and firewalls, cyber threat is real. With the numerous social media accounts available and the use of 3rd party apps for creating content and scheduling posts, hackers have more avenues to crack through to a business; increasing risks of breaches in data records, intellectual property, and ransomware. In this case, having cyber insurance could be invaluable.

Social media offers a world of opportunities but just like any other channel, social media is not risk-free. The risks can be mitigated with effective policies and practices. Of course, as much as precautionary measures can be taken, you should consider insurance to cover your business if all fails. Social media marketing and risk management should be taken seriously, and it is essential for growing businesses to ensure they are both given equal attention.

Contact us today to receive assistance on how insurance can protect you against social media risks.