If there is a “Glassdoor Attack” on my company, am I covered by Cyber Insurance?

india_insurance_logo_2

Indian Companies are facing a new kind of reputation attack by  disgruntled employees posting defamatory messages through companies such as Glassdoor who have built a business model around monetizing the disgruntlement of employees.  The essence of this model is to encourage  employees present and former to write a review about their employer so that it would be a guide to others who may be seeking employment in the company. There are also similar companies such as Mouthshut who operate in the area of products and services asking product users to write reviews about the product experience.

At first glance, such services appear to be  oriented towards consumer information as it helps people who would be dealing with the company to get information that can help them make an informed purchase decision.

However, in practice we often find that disgruntled elements use such opportunities to post unsubstantiated defamatory comments which can unfairly hurt the genuine business of the Companies.

Among such  companies who have built a business around publishing consumer responses, those like Glassdoor stand out since they publish remarks from those who pose as present or former employees. Compared to product users, employees have a close emotional attachment to a company and hence when they are dissatisfied,  their reactions tend to be more volatile and vindictive. Also competitors can use the service to hurt their rivals. Human tendency is such that when we feel good about another person, we keep it to ourselves, but when we feel bad, we tend to go an extra mile to “teach a lesson”. Hence negative comments of employees always find more expression than the positive comments. By the very design therefore such services are geared to making money out of negative responses.

Some organizations try to achieve a balance by their PR firms monitoring the negative postings and countering with positive postings to match them. But ethical companies try to avoid such artificial means of creating a positive opinion and try to live with the reputation loss or look for other options.

When the reputation of a company gets hurt by motivated employees who have been either unhappy with their promotions or for having been removed from service, the victim companies need to launch legal action against the erring employee or ex-employee as well as the abetting service provider like Glassdoor. However, many of these services take shelter under privacy concepts and hide the identity of the persons posting the remarks and seek privileged protection under freedom of speech regulations both in India as well as in their countries.

As a result, the Victim companies are denied legal remedy available to them through Courts.  A legal discussion on the rights of such companies to hide behind the glass door of privacy and throw stones at others is out of place here. These companies survive more because the cost of pulling them up legally is considered uneconomical for most business entities. Indian law under ITA 2008 coupled with IPC is still strong enough to deal with such issues despite the erroneous deletion of Section 66A by the Supreme Court.

This loss on account of reputation risk cannot be avoided since employer-employee relations do go sour for various reasons. There is one employer and many employees and it is unthinkable that there would be any company which does not have one or more disgruntled employees to contend with.

Information Security professionals cannot defend against this type of risk through technical means. Hence the risk cannot be mitigated as well.

The only other options are “Risk Absorption” and “Risk Transfer”.

But Corporate risk managers consider it necessary to defend such risks which have an adverse impact on the business of the company and cannot absorb the risk indefinitely.

The natural corollary to this is therefore whether such a risk is covered by a Cyber Insurance Policy? so that it can be transferred.

If a Cyber Insurer is made to pay for the reputation damage caused by a defamatory remark posted on say glassdoor.com, then the Cyber insurance company will take up the legal battle against the offending website which has abetted the disgruntled, vindictive employee or at least bear the cost of such legal fight.  The advantage for the Insurance company in fighting such battles is that it can aggregate several losses of this kind and find the means to fight a battle even in a foreign country. The legal fight therefore becomes feasible for an Insurance company.

If you are a corporate manager therefore, you would like to know if Cyber Insurance policies cover such reputation damages.  We are trying to understand what the market perception on this is, through the India Cyber Insurance Survey 2015. Participate in the survey and record your views so that it will become a guide to the Insurance companies in structuring the policies.

Naavi

Print Friendly, PDF & Email

About Vijayashankar Na

Naavi is a veteran Cyber Law specialist in India and is presently working from Bangalore as an Information Assurance Consultant. Pioneered concepts such as ITA 2008 compliance, Naavi is also the founder of Cyber Law College, a virtual Cyber Law Education institution. He now has been focusing on the projects such as Secure Digital India and Cyber Insurance
This entry was posted in Cyber Law and tagged , . Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.