Chartis Insurance UK has extended its Directors and Officers (D&O) policy to include an endorsement that will pay for public relations expenses which results from social media threats related to company's confidential information leakage.
Chartis said that extension is to help a company either mitigate a crisis which results from a credible threat that confidential information about a company will be posted on a social media platform or website, or manage the reputational damage to a company caused – or potentially caused – once disclosures are made.
The social media cover will be triggered where the CEO or CFO expects the stock price to fall significantly as a result of rumours of disclosure, or due to publication of the confidential information.
Chartis vice president Financial Lines David Walters said that the domination of the global news headlines by Wikileaks’ publication of leaked government documents is a vivid illustration of the power of social media.
"Although the focus has been on government there is, however, no room for complacency for business. In a recent interview Julian Assange, Wikileaks founder, said that 50% of the leaked material they were holding related to the private sector. This type of disclosure of internal or confidential communications presents a number of threats for companies and their directors and officers.
"Our objective in extending the policy was to be proactive in helping our clients to mitigate and manage potential reputational damage, and reduce the risks of shareholder suit and potential claim," Walters said.