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Businesses without social media policies face liability risks

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A recent Crain's Cleveland Business article relayed that many small- and mid-sized businesses are still without policies pertaining to social media use on network computers.

This fact is worrisome, as many recent reports have discussed the dangers involved with social media sites, such as Facebook and Twitter. Cybercriminals have increasingly targeted these sites for malware campaigns. If businesses do not have the proper protection in place, they could fall victim to data loss or other damaging viruses.

Aside from cybercriminals, employees on these sites present potential defamation, libel, copyright and other risks unless companies create and enforce policies and guidelines for social media use.

Even with policies in place, companies may want social media coverage within their business insurance. However, the report states that small and mid-sized companies are behind in purchasing these provisions.

"They've been very slow to react," Richard Betterley, risk management consultant president of Betterley Risk Consultants, told the news source.

In all, Betterley estimated that $200 million was spent on social media coverage during 2010, which was equal to 2009's total. Without investing in this coverage, small and mid-sized companies are leaving themselves open for potential lawsuits and further damaging actions that could ruin their business. 

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