Brand and reputation risk protection is something that major companies and organisations are – or should be – all over; but for many small and medium sized enterprises that is just not the case. But failure to address this could have a much wider knock-on impact both up and down complex supply chains.

This gap in cover and risk understanding was recently identified by the CII Insurance Broking Faculty New Generation group, working as part of a CII talent development programme, who looked in depth at the need for brand and reputation risk cover; the barriers to insurer participation; the level of coverage currently available; and most importantly how the insurance industry can and should respond.

With a view to driving change rather than just highlighting the issues, the report, ‘Reputation Risk in a Social Media Culture’, includes a breakdown of four elements of protection that the group believe a brand and reputation risk policy aimed at SMEs should cover, namely: prevention risk management; crisis costs and containment; indemnity protection for loss of revenue; and post-loss consultancy.

The group’s recommendations also include a call for data capture and collection to be developed to allow quantification, with insurers and brokers coordinating a shared approach to recording loss data.

The group’s view is that once the insurance industry becomes more comfortable with brand and reputation risk, and as data becomes available, insurers will begin offering ‘brand and reputation’ cover by way of an extension to commercial combined or liability policies. In the meantime, more insurers could provide policy extensions to assist SME companies in prevention, mitigation and crisis management.

The group’s report is a sign that incoming insurance leaders are embracing the need to innovate and address difficult issues and this can only be a positive sign for risk managers looking for cover for emerging risks.

The full report is available on the CII’s website at www.cii.co.uk/40917

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