Social media has become a core marketing and communication channel for businesses of every size. While it offers visibility and customer engagement, it also carries legal risks that many companies underestimate. A careless post, misleading claim, or unmoderated comment can open the door to business tort lawsuits that damage both finances and reputation.
This risk is growing as more traditionally offline industries rely on digital channels to compete. For instance, custom apparel companies that once depended on local foot traffic now market heavily online, and according to Grand View Research, the online segment of screen printing is expected to grow at the fastest compound annual growth rate of 12.9% from 2023 to 2030. As businesses like these increase their social media presence to capture online demand, the legal consequences of what they post — and how they engage — become impossible to ignore.
Posting Defamatory Statements
Defamation is one of the most common social media mistakes that can lead to tort liability. It occurs when a business publishes false statements that harm the reputation of another individual or company. Social media makes it easy to fire off accusations, especially during disputes with competitors, vendors, or unhappy customers.
Even something as simple as accusing a competitor of “scamming customers” without evidence can be considered defamatory. Screenshots live forever, and deleted posts can still be used as evidence.
How to Avoid It: Verify all claims before posting. Avoid naming or accusing individuals or companies publicly. If criticism is necessary, keep it factual, neutral, and focused on your own experience rather than allegations.
Misleading Advertising and Misrepresentation
Social media marketing often rewards bold claims, but exaggeration can quickly cross into misrepresentation. Promising guaranteed results, overstating qualifications, or using manipulated images can lead to lawsuits based on fraudulent or negligent misrepresentation.
Consumers increasingly rely on social media to make purchasing decisions, which raises the legal standard for honesty and transparency in advertising.
How to Avoid It: Ensure all claims are accurate and substantiated. Use clear language, disclaimers where appropriate, and avoid absolute promises. When showcasing results, explain that outcomes may vary.
Intellectual Property Infringement
Using copyrighted images, videos, music, or logos without permission can expose a business to tort claims and statutory penalties. Many companies mistakenly assume that content found online is free to use or that crediting the creator is enough.
Reposting a competitor’s branded content or using trending audio without proper licensing can also trigger legal action.
How to Avoid It: Use original content or licensed media only. Maintain a content library that employees are allowed to use, and train staff on copyright basics before granting posting access.
Invasion of Privacy and Publicity Rights
Posting photos or videos of customers, employees, or private property without consent can lead to invasion of privacy claims. Using someone’s image or likeness to promote your business without permission may also violate publicity rights.
This risk is especially high for service-based businesses that document their work on-site or interact with customers in personal spaces.
How to Avoid It: Obtain written consent before featuring individuals in promotional content. Use standardized media release forms and ensure employees understand when consent is required.
Uncontrolled Account Access
As more employees gain access to company social media accounts, the likelihood of mistakes grows. Small businesses may find that social media responsibilities expand as the business scales, increasing the chance that posts are shared without consistent review or supervision.
How to Avoid It: Limit social media access to a small number of trained employees and clearly define who has authority to post on behalf of the business. Establish an approval process for public-facing posts, especially those involving customer interactions, promotions, or commentary about competitors. Regularly review account access and remove permissions promptly when roles change or employees leave the company.
Privacy Policy Violations
Businesses that collect user data through social media promotions, contests, or lead forms must comply with privacy laws. Failing to disclose how data is collected, stored, or used can lead to tort claims tied to consumer privacy violations.
Social platforms often change their data policies, making compliance an ongoing challenge.
How to Avoid It: Maintain an up-to-date privacy policy that includes social media interactions. Clearly disclose data usage and obtain consent where required.
Failure to Monitor User-Generated Content
Allowing defamatory, offensive, or infringing comments to remain visible on your social media pages can escalate liability. While users create the content, businesses may still face legal consequences for failing to moderate harmful material. Negative or false claims left unaddressed can also harm your brand credibility.
How to Avoid It: Set clear community guidelines and actively monitor comments. Remove inappropriate content promptly and document moderation actions.
Negligent Training and Supervision
When employees cause harm through social media and the business failed to provide proper training or oversight, courts may find negligent supervision. This is especially relevant for small teams where roles overlap, and formal policies are often missing.
Many lawsuits arise not from intentional wrongdoing but from a lack of guidance.
How to Avoid It: Develop written social media policies, conduct regular training, and limit posting permissions to trained individuals only.
While social media-related lawsuits may seem rare, their impact can be severe. In fact, business tort lawsuits account for less than 5% of civil filings in state courts, but those cases often involve high financial costs and long-term reputational damage.
As more industries shift online and marketing becomes increasingly digital, businesses must treat social media as a legal responsibility—not just a branding tool. Clear policies, employee training, and proactive monitoring can significantly reduce risk.
Handled correctly, social media strengthens trust and visibility. Handled carelessly, it can become the spark that leads to costly litigation.