Every day threats surround us -- Threats to our security, our privacy, our information and our reputation. Every day, companies are at risk due to employee error, government investigation, regulatory decisions, data breaches, environmental disaster or other vulnerable areas with legal exposure that needs a response before our reputation is damaged and business operations affected.
To limit our risk and exposure know where you are vulnerable and prepare, plan and develop the necessary infrastructure to monitor your company, clients and competitors in addition to the industry and regions where you operate in.
You can further protect yourself with insurance. Several insurers offer reputational risk policies that include services from crisis management and public relations firms at a renegotiated rate to assist the company or organization in the event of a crisis. Proper crisis communication can mitigate the overall financial impact of an adverse event.
For example, AIG covers through cyber risk policies for the costs associated with public relations efforts in the wake of an attack and to respond to adverse or unfavorable publicity or media attention arising out of a public relations event,” defined as “any situation which in the reasonable opinion of an Executive did cause or is reasonably likely to cause economic injury to the insured entity. Liberty Mutual Insurance, offers a crisis management endorsement as part of their commercial lead umbrella policy and offers their policy holders up to $50,000 in crisis management support.
With increased independence of company executives through social media, increased government and consumer scrutiny and instant media attention with the push of a button, any change in consumer perception of a company and its brand can damage a company's reputation -- even the federal governments. Insurance that covers the loss of revenue attributed to a change in consumer perception of an organization's brand because of a crisis should be part of any reputational risk coverage. However, being prepared and knowing you are vulnerable is the best biggest step you can make to protecting your reputation and bottom-line.
