Reputational Risk Insurance
Reputational risk covers for commercial businesses
Insurance covers to individual scenarios for companies that seek financial resilience in the face of reputational risk.
Our reputational risk protection covers your greatest asset – your name
Reputational risks rank among the top 10 global business risks. A faulty component, a hacker attack, misconduct – the consequences of events that damages a company’s reputation can be devastating. And it can happen to any company, from car makers to a food manufacturer to airlines.
The good news: reputational damage is quantifiable, which in turn makes it insurable. An insurance covering reputational damage generally covers the company’s loss of profits and offers financial support for crisis management and efforts to restore its image. The policy provides indemnification for forgone forecast sales growth, giving a company more certainty for its planning. The insurer verifies the sales forecasts by comparing them with performance to date. Reputational damage resulting from cost savings leading to lower quality, fraud or other intentional acts is, of course, not covered.
According to an analysis of 125 reputation events, conducted by Aon & Pentland Analytics, the widespread use of social media is accompanied by a doubling in the impact on shareholder value from 2000 to 2018. (Source: Aon & Pentland Analytics)
Reputational risk protection can mitigate the impact of cyber attacks
Cyberattacks not only often lead to business interruption and the associated revenue losses – they also damage the enterprise’s reputation. The fall in sales resulting from a successful cyberattack, however, is not deemed to be a business interruption.
New cyber risks are no insurmountable obstacle but the reputational risks involved require defined loss triggers. The challenge in this coverage concept lies in defining appropriate loss triggers and giving prior thought to loss adjustment policy – a challenge Munich Re is happy to tackle with tailored solutions.
Components of our reputational risk cover
Incidents that spark a reputational crisis can occur in almost any area of the organisation. This is why our insurance solution provides cover for any activity in your company related to business or clients. It even covers allegations.
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