This is Insurance coverage designed to help a business limit the negative impact of events on the business’ reputation. Crisis management coverage has previously been arranged for larger organizations, however small and medium-sized businesses should consider this too if their profitability is closely linked to maintaining a good reputation.
A company’s reputation is one of their most valuable of assets. It is difficult to value and often difficult to protect. It can take many years to establish the good reputation of a brand, but it can be destroyed in an instant.
Thanks to technology, news spreads quickly. Stories can go “viral” thanks the Internet via email, social media, and other websites. This combined with the 24 hour news cycle provided by Television networks and Radio makes it very hard to prevent a bad news story about an organisation causing damage to your reputation.
This cover has mainly been overlooked because the majority of businesses do not face threats to their reputation often. As negative publicity for them is rare, they are often unprepared for this if it occurs. For example, a notice of a health code violation or a food poisoning outbreak can easily spiral out of control. As a result it can severely impact the ability of the business to stay open.
Many Insurance policies offering crisis management coverage may narrowly define the types of events that are covered. Types of events that may be covered include workplace violence, assault, firearm use, food contamination, and workplace accidents. Events may also include credit card breaches or the hacking of a company’s computer network by an outside party. The coverage may be triggered as soon as news of the event is reported by the media, whether in regional forums or national forums. Coverage is usually set for a limited period of time, such as 60 days, after a crisis event occurs.
Policy coverage can include the following:
The financial and management implications of incidents and subsequent litigation means expert preventative and incident management advice is essential. It is so important that those responsible in managing a company can demonstrate that they are well-equipped to deal with unexpected crises or emergencies.
A Crisis management solution should make sure there is operational preparedness, minimising business interruption, deal with any image damaging consequences as a result of crisis related loss, and subsequently strengthen your market position.
Some insurers can provide pre and post incident risk management offerings to help our clients reduce exposure to threats and minimise the impact of any incidents on their business operations.
Contact a specialist insurance broker such as Cooper Professional Risks Pty Ltd.
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