Before we count the ways to manage your business’s reputational risk, let’s spend a minute or two understanding what reputational risk is and how the reputation of your company affects your bottom line.
Reputational risk is the possibility that uncontrollable external events such as negative publicity or an unpopular or illegal action taken by someone high up in your company will negatively impact public perception of your firm.
However irrational it seems for the company as a whole to be blamed for a single incident, that single incident may cost you customers or clients. You may also suffer backlash from your stockholders and endure harmful gossip online or in the media. A tarnished reputation will likely make it harder to recruit new talent, too, increasing staffing costs.
One of the things that make reputational damage so dangerous is that you never know when it will happen. This is precisely why it is crucial to have Reputational Risk Insurance in addition to General Liability Insurance. A Reputational Risk Insurance policy will typically cover you for your company’s loss of profits and offer financial support for crisis management as you take steps to restore your public image. The policy will also indemnify you for lost previously forecast sales growth.
As with all insurance, your premiums for Reputational Risk Insurance will vary depending on the type of business you are in, the size of your company and revenues, whether you retain especially sensitive records, and whether you have a prior breach in your history.
How Our Knowledgeable Insurance Advisors Can Help
If your business is located in New Jersey, contact Blue Lion Insurance Advisors, LLC at (732) 649-1600 or online to receive personalized service and the most comprehensive, cost-effective Reputational Risk Insurance available. Because our advisors do not work for any insurance company, we do not profit from steering you in a particular direction. Instead, we always put your best interests first.
5 Ways to Manage Your Reputational Risk
1. Keep your confidential data confidential
Preventing data breaches is extremely important when you are trying to protect your business’s reputation. Hackers are everywhere so your staff has to be well-trained to fortify your information and protect the company from leaks (e.g. by learning to detect new phishing scams as they become current). You should also be proactive by creating a task force to put emergency plans in place if you suffer a cyber attack. Depending on your individual circumstances, it may be wise to carry Cyber Security Insurance as well.
2. Make sure company values are clearly stated and adhered to
The way leadership behaves will color everything. Make sure that everyone, from CEO to cleaning staff, understands that your company will not permit discrimination or sexual harassment of any kind. Be careful to model good behavior. Nobody should be taking home extras from the supply closet; no one should be sending disreputable texts.
3. Be alert to external reputational risks
Some reputational risks come from outside the company. It’s important to identify unethical behavior in those you interact with — whether they are suppliers, independent contractors, suppliers, or even partners. Be aware that the general public is likely to associate you with the company you keep so try to disengage from any unethical operators.
4. Be careful to avoid service complaints and product defects
Remember the adage: “a stitch in time saves nine” and make certain that you have excellent quality control and polite, efficient employees. Only employees who are good communicators should be interacting with customers or clients, and all complaints should be handled as quickly as possible. These days when complaints are quickly posted on social media, you have to be especially careful.
5. Keep employee morale high
It is well-known that disgruntled employees can be a company’s worst enemy when it comes to damaging a business’s reputation. Hiring well and providing a productive, pleasant work environment can go far in terms of extending good word of mouth. The better you treat your employees, the better they will treat clients, suppliers, and delivery personnel and the more you will grow in public esteem.
Contact Our Experienced Reputational Risk Insurance Advisors Today
For superior customer service and Reputational Risk Insurance that will keep your company’s insurance policy Blue Lion Strong™, get in touch with us for a free consultation. We will help you find the best policy to meet your business needs and will show you the way to protect your reputation as we protect ours.