Did you know that many insurance policies, especially in the civil liability branch, provide for the possibility of compensation for the indirect expenses that a company could have to meet to restore its reputation after an incident?

This small contribution by the insurer can be activated as long as the underlying policy has been activated and is usually a small percentage of the effective damage the company faces in managing its reputational risk as a whole.

After examining the company’s exposure to reputational risk, it is advisable to consider a policy that will protect the company from “peak” events, potential losses that are infrequent but have a high financial impact.

What benefits could reputational risk insurance bring?

Activation of a Reputational Risk policy:

  1. The policy guarantees comprehensive coverage for the reputational risks the company specifies and needs to transfer to third parties because it cannot assume them itself.
  2. It helps with the strategic management of the operational risk framework and guarantees business continuity.
  3. It offers coverage for consultancy services to find a comprehensive solution to the problem.

Its main advantage is to ensure the company’s resilience if an incident occurs, enabling it to respond and mitigate the consequences. The insurance solution helps to transfer the company’s risk to the Insurer, covering loss of earnings and offering financial support for crisis management and efforts to restore the company’s image.

 

Which companies is Reputational Risk insurance aimed at?

Companies that depend on the high value of their brand in their operations, companies that provide services to mass markets, companies that manufacture products, as well as those that handle confidential data and depend on the perception of their stakeholders.

 

Reputational Risk policy coverage

Reputational Risk insurance offers protection in these three areas:

  1. Protection regarding the legal framework: issues caused by legislative or regulatory changes applicable to the sector in which the company operates.
  2. Protection against events in the sector determined by the natural environment: these are normally difficult to anticipate.
  3. Protection of the company’s operations:  intrinsic and residual risks related to the business’s production processes, strategic factors, human error, intentional damage:
    1. Ethical questions/integrity (fraud, corruption, theft)
    2. Products/services (safety issues with products and services, health and environmental problems)
    3. Security (physical or cybersecurity)
    4. Financial (reporting, accounting and credit rating issues)

 

How can we help your business?

RibéSalat, Insurance and Reinsurance Broker with more than 30 years’ experience, offers advisory services and is a specialist in this type of product, helping to transform reputational risk into an opportunity for success.

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Let's talk about your needs.