Something to talk about
Is your agency being proactive with personal lines customers about their social media exposures?
By Nancy Doucette
Proactive agents contact their personal lines customers well ahead of when a youthful driver is due to be added to an auto policy. It's just good business to recommend that parents have a conversation with their teen about safe behaviors when they're behind the wheel.
Given the popularity of Facebook and Twitter, shouldn't parents also have a conversation about safe social media behaviors? According to Matt Cullina, CEO of IDentity Theft 911 (IDT911), a provider of identity/reputation management, data risk management solutions and breach services to some 180 carriers, families need to start educating their children about social media responsibilities earlier than they ever expected.
"Based on our research, we found that the average age a child gets a smartphone is nine years old," Cullina points out. "Bear in mind, they've been 'playing' with their parents' phones for years before that. Their video gaming systems can access the Internet, they have WiFi access at home, and Internet access at school. They're digital natives.
"Parents need to develop and enforce their own 'rules of the road' for their children to prepare them for navigating the online world—whether it's social media, texting or the general use of the smartphone.
"It's easy for kids to connect with all sorts of people. In fact, children in the 9 to 14 age range have more online connection points than they do in-person connections," Cullina continues. "So parents need a window into their kids' online activities."
Last summer, IDT911 hosted a webinar at the National Parent Teacher Association Convention during which Cullina presented the findings of a Harris Interactive survey of parents about their children's social networking habits and what issues cause them the greatest concern. The findings revealed that, despite parents' efforts to monitor their children's online activities, there are still blind spots. And why wouldn't there be? According to Nielsen statistics, the average teen sends and receives some 3,700 text messages a month.
Cullina shared other statistics as well:
• 69% of teens communicate with strangers online
• 52% of high school students have been bullied online
• 52% of high school students have bullied others online
Gone are the days of a taunt on the playground or school bus being witnessed by only a handful of classmates. Sticks and stones have gone digital and in some cases viral. Online shaming is the modern-day version of the scarlet letter, according to a January 2013 report on NPR's "All Things Considered." Among the troubling incidents mentioned, the report cited a situation where a boy posted a suggestive photo of a female classmate. In less than an hour, the photo had 443 likes and 261 comments. The boy reported receiving 2,000 friend requests as a result of the photo. (The report is available online.)
According to Swiss Re's "The Impact of Social Media on Personal Lines" (available online), a growing number of lawsuits are being filed over "e-personating"—fake social networking profiles that defendants have created about real individuals.
While parents may be concerned about their children's online activities, they may not be thinking about the insurance implications of those activities, which provides producers and CSRs something to talk about with clients.
Can of worms
Before sitting down with clients to discuss social media exposures, front line staff need to do some research because if a client asks: "Am I covered?" the answer should be: "It depends."
Rough Notes addressed some of the coverage sticky spots in the June 2012 article "So social … so liable" in which author Bruce D. Hicks, CPCU, CLU, spoke with an attorney about the exposures related to social networking.
For this month's article, we spoke with representatives from The American Association of Insurance Services (AAIS) and MSO® (The Mutual Service Office, Inc.) to find out how their homeowners and personal umbrella forms and endorsements deal with social media. We also spoke with Curtis M. Pearsall, CPCU, CPIA, AU, ARM, AIAF, president of Pearsall Associates, Inc., which provides errors and omissions loss control and risk management services.
Jan Scites, JD, CLU, ChFC, president and CEO of MSO, says, "We don't make snap decisions about issues like this. MSO has a relationship with a law firm that has an expertise in the area of social media. They provide us with good input around social media trends.
"Sometimes things are straightforward and direct. Then there are areas like social media—they're amorphous—they're all over the place," she says.
Jan Kozlowski, vice president—insurance programs and regulatory compliance for MSO, notes, "Once you bring in social media, which is relatively new in the history of liability coverage, you're looking at a different type of injury—slander, violation of someone's integrity, or privacy issues. Those fall under personal injury coverage. Personal injury isn't covered by our standard homeowners policy. It has to be added on."
Joseph S. Harrington, CPCU, ARP, director of corporate communications for AAIS, says the standard AAIS homeowners policy doesn't have personal injury coverage written into the base form but it can be endorsed on. He says it covers oral or written publication, including electronic publication of material that slanders or libels a person or organization, disparages a person's or an organization's goods, products, or services, or violates a person's right to privacy. It provides defense coverage and indemnity for legal liability in those cases.
"There are of course exclusions to that. They are fairly logical," Harrington notes. "There is no coverage for deliberate acts—deliberate libel, deliberate slander, deliberate publication of information that is false, or deliberate release of information that you know is private or should be protected. We attempt to preserve the personal injury coverage for the occasional random comment."
An ounce of prevention
Acting on behalf of their carrier members, both AAIS and MSO have developed electronic aggression endorsements. The Centers for Disease Control uses the term electronic aggression because it is more precise than cyberbullying. (A brief on cyberbullying is available at the CDC Web site.)
For its part, AAIS has excluded cyberbullying from its Personal Umbrella Program. Bodily injury, property damage, and personal injury arising out of electronic aggression are all excluded. "Bodily injury and property damage are excluded under the electronic aggression exclusion because it has been reported that some young people who had been bullied committed suicide," Harrington explains. "That raises the possibility of a bodily injury claim which could expose personal lines insurers to an intentional act that is not traditionally intended to be insured under personal liability.
"The exclusion in our personal umbrella program is more comprehensive in dealing with something that is aggressive, is intentional and can spread like a weed," he says. "It goes beyond the personal injury coverage limitations and existing intentional injury exclusions that apply to bodily injury and property damage. AAIS cannot predict the scope of insurance exposure to cyberbullying and related activity. We are clarifying that certain types of claims, whether they prove to be common or rare, are not intended to be covered under personal liability policies.
"AAIS will be seeking to adopt something like that in our homeowners revisions going forward but for now it's only in our personal umbrella program."
MSO introduced its electronic aggression exclusion for both the homeowners and the personal umbrella programs. Sue Quimby, CPCU, director—client relations & training and senior product development analyst for MSO, says: "Given the fluid nature of the issue, we weren't sure whether the personal injury exclusion would hold. We wanted to be proactive and state a definite exclusion."
Kozlowski notes, though, "Under personal injury, there is no specific electronic aggression exclusion as there is under the homeowners and personal umbrella so it becomes a coverage question dependent on the facts of the incident."
MSO also introduced an optional aggregate limit on personal injury, hoping to protect carriers from the question: If someone posts something slanderous on Facebook, is it one occurrence or is there a separate occurrence each time somebody views it?
All that aside, when the actions of children are concerned, the courts may interpret coverage more leniently, and because there hasn't been a lot of litigation related to social media as yet, the facts of the case may have a bearing on whether coverage applies.
During the seminars that E&O expert Curt Pearsall offers to agents, he says he likes to ask his audience whether cyberbullying is covered by the homeowners policy. He gets a variety of answers, which leads him to recommend that agents speak with their carriers about social media coverage. Some in the audience will tell him they have asked and they don't get definitive answers. "The claims folks will say: 'Tell me the facts and I'll tell you whether it's covered.'"
With that in mind, Pearsall recommends staff meetings to be sure everyone is on the same page with respect to social media coverage. "If you're asked by a customer, 'Am I covered for my social media exposure?' the best answer is: 'It depends.' Be careful what you say and what you put in writing."
That said, Pearsall believes that the best customer is an educated customer. "If the agency has a newsletter, bring up the issue of social media. Say something like, 'In checking with our homeowners carriers, we are told that claims involving social media are fact-sensitive.' That might prompt the client to contact the agency for more information. Agents can encourage parents to have discussions with their children about their social media responsibilities. Having that conversation early on is a positive step to avoiding problems later," he says.
Dealing with blind spots
At the PTA Convention last summer, IDT911 introduced a "parental intelligence" tool called SocialScout™ that helps parents monitor their children's social networking and smartphone activities. IDT911's Cullina explains that SocialScout is similar to an online executive dashboard. It's connected to the child's sign-on and so it doesn't matter where the child signs on or what device the child uses.
SocialScout's charts and diagrams let parents know who their children are texting with and what time of day those texts are being exchanged (something at 2 a.m. should be a flag), among other need-to-know details. Parents can drill into the texts to examine content if necessary. They will receive real time alerts if the child's post or text includes previously identified words—expletives, drug or sexual references. And because parents are generally digital immigrants, not digital natives, SocialScout includes an acronym decoder. HNTI. (That's text for "how nice that is.")
Parents can set SocialScout to monitor the online behaviors they're concerned about. Cullina explains that this tool isn't "Big Brother." There's an icon on the child's device that reminds them that SocialScout is there. Ideally when the child first receives the device, parents introduce them to SocialScout during the discussion of expectations, online etiquette, and responsibilities—and maybe even present the child with a "contract" of sorts. (Google "Gregory's iPhone Contract" for an example.)
"Agents can do a real service for their insureds by speaking to them about social media—both from a coverage perspective and on a practical basis," says MSO's Scites. "Agents should take every opportunity to help insureds understand emerging issues. Social media is beyond emerging—it's exploding and pervasive."
For more information
IDentity Theft 911
Web site: idt911.com
Pearsall Associates, Inc.
Web site: pearsallassociates.com