Reputation is built on trust but can be quickly damaged if not appropriately dealt with.
Reputation is a matter of trust – and if that trust is undermined, customers vote with their feet and wallets very quickly.
This is particularly so in the entertainment, hospitality, food, beverage and travel sector where trust is tantamount.
Reputations can be damaged quickly and extensively, and while the best-known scandals inevitably involve high-street brands, all businesses are equally at risk, says Edel Ryan, Partner at JLT Specialty.
“The facts and the truth can often get lost in a media storm be that from professional journalists or upset social media individuals who tend to shoot first and ask questions later.
The entertainment and food and beverage sectors are examples that are very sensitive to reputational damage – especially as businesses trade on their values – such as experience, service and ethically sourced products.
And these reputations, built on years of trust, can be damaged quickly from one incident.”
One well-known example is the Wahaca Mexican restaurant chain, which proved just how important the response to a crisis can be.
Following a reported norovirus outbreak, the chain quickly took the decision to publicly close down nine sites for deep cleaning; and apologised in person to many of those who fell ill.
The incident led to the chain sending staff home, pulling out of a new opening and cancelling an annual festival.
The decision financially cost the company rather than their staff and customers, but was well received insuring their reputation remained intact, if not enhanced.
More and more of the larger corporate businesses are looking for bespoke reputational risk solutions to address the gap in programmes to protect their loss of revenue, supported by crisis response services.
Such sophisticated and tailored coverage can be time consuming and expensive to develop and possibly out of the reach for most SMEs.
Ryan says: “We have invested a huge amount of time listening to our clients around the globe to really understand their needs and priorities.
“We then took this challenge to the insurance market to try and square the circle of bespoke needs with affordable cover and, as a result, we are delighted to announce the launch of the exclusive JLT Reputation Protect Plus in partnership with Allianz.
“The insurer is equally invested to making this work and have committed to nearly all of our requests to expand the policy wording.
Together we have a product that has all the key parts of what a bespoke solution would deliver but is now available to wider commercial clients.”
Strengths, risks and opportunities
The exclusive policy wording is aimed at corporates with revenue of more than £100 million a year, which combines the immediate loss of revenue with the crisis public relations media response services. But that is not all, says Ryan.
“The financial loss cover aside, we wanted to find a way of expanding this insurance solution by helping the client identify the potential risks their businesses face and develop tangible response and prevention strategies.
“As part of the premium, all clients will have access to a workshop with third- party specialist Media Tenor, resulting in a tangible report on their specific risks helping to detect strengths, risks and opportunities regarding their reputation.
“The application process for the new JLT Reputation Protect Plus has also been designed to reflect the time constraints on the senior leadership team within a business and is very straightforward requesting specific material that is likely to be already produced by corporate businesses,” explains Ryan.
She adds: “Most reputational problems are not the result of bad behaviour or criminal activity but about normal everyday problems that get taken out of context and spread rapidly in this digital world.
“Cyber-attacks are one just example and there are countless media cases where the inappropriate handling of breaches with customers can lead to loss of customers.
“We believe our new off-the-shelf tailored solution opens up this key reputation risk cover to a much wider audience and will fill this much needed coverage gap.”
Download Whiteboard magazine
For further information please contact Edel Ryan, Partner on +44 (0)20 3394 0480