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Social Networking Imperiling Risk Management

By Bill Kenealy, Insurance Networking News
May 3, 2010
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As Americans become more enmeshed in social media sites, it opens up new avenues of risk and challenges for risk managers.

One such risk is engendered by the anonymity people enjoy online. A survey of 1,040 Americans sponsored by the Chubb Group of Insurance Cos. revealed that only half (51%) of the people surveyed always use their real name on social networking sites.

"Twitter, Facebook and Foursquare have created new social media risks and an environment where many people don't know who they are talking to online,” says Kenneth Goldstein, worldwide media liability manager at Warren, N.J.-based Chubb.

Another risk is location-based, as something as innocuous as a Facebook update can reveal the location of a hidden data center. “They don't realize who can see their location, creating many exposures for individuals and companies," Goldstein adds

Encouragingly, 66% of respondents said they would not use mobile technology that shows people on social networking sites where they are located. "Although this lets your friends know where to find you, it also alerts criminals of your whereabouts, including when to burglarize your empty home," he says.

Another interesting result was that 64% of respondents said their company had no policy for talking about the company on social networking sites. Of the 36% who said their company had a policy, 18% said they were encouraged to talk about the company, and 18% said they were prohibited from talking about the company.