Protection against reputational risks
A bad reputation can be expensive. Values such as reliability, sense of responsibility and trust are therefore particularly worthy of protection for companies. Funk offers individual insurance and risk management solutions for the growing concern of reputation risks.
‘It takes 20 years to build a reputation and five minutes to ruin it.’ The quote from investor Warren Buffett is more relevant today than ever. Media coverage of product defects, spectacular hacker attacks or compliance violations have made companies and risk managers sensitive to reputational damage. At the same time, topics like sustainability, environmental awareness and voluntary commitments are important pillars in marketing and sales. In short, corporate social responsibility is now anchored in the strategy of many companies – especially those from family-run SMEs.
If bad press or a PR crisis on social media threaten to damage a company’s reputation, companies should also be able to act quickly. With an emergency plan, which has been developed in advance by corporate communications, crisis management can be set in motion quickly.
Particularly affected products and industries
A positive public reputation of companies and brands is crucial for private consumption products. Food manufacturers, automotive groups, chemical and pharmaceutical companies or electronics manufacturers, for example, pay particular attention to a socially responsible and ecologically sustainable reputation. In the restaurant, hotel and tourism sector, a good reputation is likewise relevant to the turnover and profits of a company.
In the B2B segment, the transport and logistics sector in particular are striving to be perceived as sustainable. Funk expert Dr Alexander Skorna explains: ‘Long, non-transparent supply chains open the door to reputational damage – for example if child labour, inadequate fire protection, inhumane working conditions or deforestation of rainforests are revealed. These issues can often occur in upstream stages of the value-chain, e.g. in Asia or South America.’
Insurance solutions to protect your reputation
A reputation-damaging event could be connected to individual key personnel, products and services, customers or corporate social responsibility. An essential element for the insurance coverage of a reputation insurance is a potentially damaging event in the media. This includes social media in particular. This very broad-based insurance solution can also cover reputation losses resulting from cyber attacks. Funk expert Lars Heitmann explains: ‘Similarly to cyber insurance, with insurance against damage to reputation Funk customers receive additional assistance services. These include, for example, professional crisis communication advice within a few hours of the damaging event.’ The additional costs for restoring the reputation, in particular marketing and advertising costs, are also included in the cover.
Coverage concept of the reputational damage insurance
With continuous brand or media monitoring, you can keep an eye on the development of your company’s reputation. The prerequisite for claims settlement is a significant slump in revenues compared to the previously defined target figures. It must be possible to link this loss back to the negative media reporting. The claims payment is not tied to a specific purpose. This means that the policy holder is free in his crisis management to choose and implement measures to restore the company’s reputation.
Criminal and intentional acts committed by defined representatives of the policy holder’s employees are excluded from reputation coverage. As a rule, this concerns the board of management and the first management level. Funk’s experts provide support in developing a tailored solution to protect your company’s reputation and advice on risk identification and assessment, as well as the implementation of risk management measures.