President and CEO of Cohen-Seltzer
Breach of cofidential data and other wrongful acts can be managed with professional risk planning.
You may have heard the old saying about how it takes years to establish a good name, but only seconds to dismantle a reputation.
Although an adverse event can bring down a solid reputation, insurance is available to replace revenue, provide access to crisis management expertise and stabilize cash flow when a firm may be most exposed.
Here are a few familiar examples where "reputational harm insurance" can help: breach of confidential data, death or injury, acts of workers not aligned with the company brand, poorly assembled products, breach of a celebrity's endorsement contract and other wrongful acts.
Assets have been insured for centuries, namely: buildings, cash, production equipment, jewelry, artwork, automobiles, precious metals, accounts receivable, credit and even human beings. What about goodwill? As an intangible asset, can reputation be quantified and valued? In certain circumstances, accountants and other financial experts will place a dollar figure on goodwill, which is reflected on the balance sheet, but only recently has a business entity been able to insure reputational harm.
Working closely with an organization, the risk professional:
- Determines which types of events would disturb the mission of the entity.
- Each potential event is evaluated in financial terms and then quantified.
- A detailed mitigation plan is required. These mitigation plans must be built on the premise of communicating the problem very quickly, and must incorporate concern, commitment and control.
If you have any questions or wish to discuss this further Cohen-Seltzer's staff can be reached at 215-542-0600. Or visit www.cosel.com.
— Daniel Seltzer, CPCU, is president and CEO of Cohen-Seltzer Inc.