Although my prowess in using social media has largely been learned from my offspring, theres no question that its use has erupted across all forms and sizes of business.
Not only is it free, it can draw in a tremendous amount of traffic. And accounting firms, large and small, have found it beneficial for a variety of purposes, including establishing expertise in an area, attracting clients, recruiting job candidates and performing potential employee background checks.
But doing business in a litigious society carries risks, and the risks generated by social media may not be covered by the typical professional liability policy.
For example, the simple practice of providing tax tips on a social media site can result in a lawsuit where someone relies on the tip and finds himself in trouble, according to Gary Sutherland, chief executive of the North American Professional Liability Insurance Agency. One of the problems is that use of social media blurs the distinction between the professional and personal aspects of life, Sutherland noted.
The benefits to firms can be substantial, but at the same time it can open them up to potential risk, he said.
There are several cases pending about individual rights in social media. In one case, a school teacher posted pictures of herself on a beach wearing a bikini, said Sutherland. Officials at the school saw this and fired her, and are now being sued for wrongful dismissal.
Accounting firms involved in social media need to create a section on social media in the employee handbook, Sutherland advised.
They might say that if the employee lists them as their employer, they have the right to review the personal site and request removal or modifications if theres something they find inappropriate or objectionable, he said. In the case of the teacher, there might not be much they could do if she didnt identify the school. However, an employer could put out guidelines that prohibit obscene or objectionable content on personal Web sites.
Situations involving third parties may not be covered by the typical professional liability policy, he cautioned.
Employment practices liability insurance, or EPLI, may apply to those situations that are not covered under a professional liability policy. EPLI is a stand-alone policy, and is in addition to the firms professional liability policy, said Sutherland.
EPLI has been around for years, but its taken on new life with the rise of social media, he added. Traditionally, it covers instances between two parties: the employer and the employee. But the importance of third-party coverage, which extends to non-employees, including customers and vendors, who have contact with the business has increased.
Accounting firms that send employees off-site should make sure their EPLI policy includes a third-party extension. For example, when a firm employee harasses the receptionist at a manufacturing site where he is conducting an audit, the third party coverage would apply, according to Sutherland. In terms of social media it could be an employee who puts out information about a vendor or another accounting firm that is false, misleading or could otherwise give rise to a suit, he said.
If you want to do social media, it has to be current and focused, he advised. In 2009, the thought was just get it out there. Now it has to be fresh in content and updated to reflect whats going on at the time. If you put out something that generates more questions than you have time to answer, its not a good idea.
And even though my employee handbook doesnt prohibit it, dont expect to see any pictures of me in a bikini on my Facebook page anytime soon.
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