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    Social influencers: Making an impression

    Angela Weaver

    The power of social media influencers is going from strength to strength as we adjust to living and working from home. From being an effective marketing channel for the beauty, travel and leisure industries, social influencers have been embraced during the crisis by international bodies including the World Health Organization and the UK’s Department for International Development, which are working with influencers on Instagram, TikTok and YouTube to spread messages about social distancing, handwashing and detecting Covid-19 misinformation[1].

    But while established influencers are helping to share news, advice and information related to Covid-19, new stars are also emerging, particularly in home fitness and education, as families go to fresh lengths to keep children entertained and occupied while parents work from home. It would be hard to imagine how anyone in the UK could have missed the rapid success of YouTube fitness star Joe Wicks for example.

    All of this activity is helping the social influencer market, that was already valued at about $8bn per year[2], to balloon in size, but it also means more people who make their living using social media channels to target followers becoming exposed to the same risks run by the traditional publishing and advertising sectors.

    Publishing risks
    Surprisingly, many bloggers, vloggers and influencers do not see themselves as publishers, even though they may have a following that dwarfs the circulation of a national newspaper.

    Key exposures from publishing occur when individuals are alleged by third parties to have said or written something defamatory resulting in a claim for slander or libel. While anyone who commits defamation on social media can be subject to court action, an influencer faces the added risk of being dumped, abandoned or sued by the brand that pays them.

    Other common infringements include breach of confidence through the inadvertent publication of private information, and breach of copyright or trademark by posting content or imagery that is owned by someone else.

    Advertising risks
    Advertising risks, by contrast, will be more closely focused around issues related to breach of contract – not all of which can be managed through insurance.

    Typically, policies are designed to cover an influencer’s legal liability, particularly to the brand they are promoting. A brand may bring a claim against the influencer for various reasons, for example, the influencer has promoted a competitor brand against the terms of their contract. Other examples might include the influencer saying something offensive, or confessing to an earlier misdemeanour, and bringing the brand into disrepute.

    Whatever the nature of the claim against them, influencers may rapidly find that while the cost of damages may be significant, the costs of defending an action are likely to be even more so, particularly if the case is lost and the defendant is also responsible for a claimant’s costs.

    Regulatory risks
    The third category of risk that influencers may fall foul of is regulatory. In the US, the Federal Trade Commission (FTC) issued 90 letters in a single batch in April 2017 reminding influencers and marketers that they should clearly state when they are being paid and they must make clear any “material connection” to the brand.

    In the UK, the Advertising Standards Authority (ASA) and the Competition and Markets Authority (CMA) are the relevant bodies. While the ASA responds to complaints about individual adverts that are misleading, harmful, offensive or irresponsible, the CMA focuses on market or business practices that may cause harm to consumers in breach of consumer protection law.

    Similar to the FTC’s approach in the US, the CMA requires influencers to be clear about relationships between them and the brand and provide up-front disclosure that is honest, transparent and unambiguous where there is a relationship. Moreover, the CMA also has an interest in the role and responsibilities of social media platforms and the brands that engage with influencers.

    The CMA has contacted a number of influencers warning them to review their practices where they had noted concerns with posts. In 2019 it also announced it had secured commitments from 16 celebrities to co-operate with guidance in all advertising posts.

    How does the cover work?
    In the UK, Beazley provides cover for social media influencers through the broker etrading platform myBeazley, as well as through an existing program with a Lloyd’s coverholder. With 75% of six to 17 year-olds wanting to become Youtubers and over 50% of Gen Z and Millennials set on creating content on social media for their livelihood[3], the market potential for insurers is clear. As the value of the influencer industry rises, so too will the scale of the financial and reputational risks. The challenge for influencers, platforms, agencies and the insurance community will be to professionalise at the same rapid pace.

    [1] https://talkinginfluence.com/2020/03/17/uk-government-partners-influencers-covid-19/; https://www.businessinsider.com/uk-government-funds-influencers-fight-coronavirus-misinformation-2020-3?r=US&IR=T;
    https://www.forbes.com/sites/abrambrown/2020/03/16/coronavirus-the-world-health-organization-is-becoming-the-worlds-most-important-social-media-influencer/#e803a315321b; https://www.mobilemarketer.com/news/who-enlists-virtual-influencer-for-covid-19-prevention-campaign/575493/
    [2] https://www.businessinsider.com/influencer-marketing-report?r=US&IR=T;
    [3]  https://mediakix.com/blog/percent-children-becoming-a-youtuber/

    About the author:

    Angela is a Focus Group Leader for media & entertainment, within PE, which is in turn within Specialty Lines.

    Angela Weaver
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