ACE USA, the US-based retail operating division of the ACE Group, and the Information Law Group, today released a white paper discussing the business benefits of social media participation, and describing how to respond in a proactive manner to the many risks posed by social media.

Social Media: The business benefits may be enormous, but can the risks – reputational, legal, operational – be mitigated?was co-authored by Toby Merrill, vice-president, ACE Professional Risk, Kenneth Latham, vice-president, ACE Professional Risk, David Navetta, CIPP, partner, Information Law Group and Richard Santalesa, senior counsel, Information Law Group.

This social media white paper explores how a business can harness the power of social media, as well as how its use can translate into benefits.

The risks associated with social media include reputational, legal, and operational – impacting privacy, security, intellectual property, and employment practices, among others.

“The business benefits of social media participation can be substantial, while the cost of non-participation, or opting out, may mean anything from losing business to losing touch with your customers and important trends in your industry,” comments Merrill.

“Of course, there is also much to lose if your company does not respond proactively to the many risks posed by social media. It is imperative that companies have adequate insurance coverage for their social media activities, and review their coverage parameters and amounts regularly,” Latham adds.

“Apart from offering social media guidelines for employees, companies should also follow certain practices to ensure their corporate safety on line, by engaging the proper legal team early in the process. Organisations need to also identify the laws and legal risks that may apply, ensure they are complying with third-party sites’ guidelines, engage in active site monitoring, and consider creating a response team,” adds the Information Law Group's Navetta.

The analysis was designed to help organisations understand risk, to perform appropriate cost-benefit analyses and then design mechanisms to mitigate that risk to an acceptable level.

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