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Reputational Risk Management

We can help protect your business’ reputation with intelligence on emerging threats, expert crisis consulting and efficient risk transfer.

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News travels fast, so planning for business reputation risks is critical.

We can help you anticipate and prevent reputational threats, respond and recover quickly if a crisis occurs, and reduce the potential financial impact of reputational damage.

What is reputational risk?

Reputational risk is the potential damage to your business if your customers and stakeholders believe you’ve failed to meet their expectations.

Negative perceptions can lead to a loss of trust in your organization, potentially harming your brand, market value and revenue. It can affect:

  • Who buys from you
  • Who wants to work for you
  • How other businesses engage with you

Your reputation is one of your most valuable assets. It’s worth taking care to protect it as you would any other asset.

The Insurer TV Risk Spotlight on Reputational Risk

What are the causes of reputational risk?

Today’s businesses face increased scrutiny from the public, media, regulators and activists.

Social media’s influence is a major factor, particularly among younger people, who increasingly rely on it for news and opinions.

It can amplify any event that causes negative publicity. For example, a product failure or a damaging tweet can travel around the world in minutes.

A crisis can appear to come from nowhere, spread like wildfire and be hard to control.

In this fast-moving landscape, reputation crisis management can be challenging. Many organizations don’t have a complete picture of their reputational risks or the impact they could have on future profit.

But the risk can be managed through insurance and risk mitigation strategies.

How is reputation tied to ESG?

Environmental, social and governance (ESG) factors can affect your reputation and vice versa. If your reputation suffers, it may result in a poor ESG rating and that can impact your bottom line.

Stakeholder perception of your organization is important, and many are using ESG ratings to decide who they buy from, do business with or invest in.

In the short term, your customers and clients may take their business elsewhere. In the long run, you may struggle with employee retention and recruiting.

Additionally, investors are using ESG ratings as a factor in investment decisions. Don’t let reputational risks derail your ESG efforts.

Can reputation be insured?

Businesses have traditionally found reputational risks difficult to insure as their unpredictability made them hard to assess and quantify.

Our insurance solution focuses specifically on risks most likely to affect any business exposed to public opinion, especially those in leisure and hospitality, retail, transportation, charities and non-governmental organization (NGOs), and manufacturing.

The reputational risk triggers include:

Abuse and discrimination

Videos or reports of employees discriminating against or abusing customers or other employees or cruelty to animals can go viral in minutes leading to reputational harm.

Actual or threatened injury or harm

Incidents such as physical injury, disease outbreaks, abduction, active assailant attacks and products that cause harm can have an immediate impact on confidence and reputation.

Damage by association

Your reputation can also be tarnished by the celebrities or other businesses affiliated with you if they commit a crime or act unethically.

Each policy is designed to cover a client-selected number of the nine key perils described under the headings above, but it is possible to discuss other perils for inclusion as insured events on a bespoke basis.

What is reputational risk insurance?

Through our Reputational Crisis Insurance, we help you understand, prevent, manage and recover from reputational damage.

  1. 01

    Artificial intelligence-powered data analysis

    We use artificial intelligence (AI)-powered data analysis from our partner Polecat to help you understand what publicly available data, such as social media, is saying about your business and scan the horizon for emerging threats to help prevent risks from occurring.

    The Polecat online platform monitors eight million online sources, including all tier-one media globally and more than 30 million social media posts.

    Polecat's platform helps identify and quantify the key reputational risks and topics impacting global organisations.
    Artificial-Intelligence powered data analysis

    And WTW’s Reputational and Crisis Dashboard aggregates Polecat’s data for nine triggers and named perils on a single platform in real time.

    Responsible Business Intelligence (RBI) index

    Polecat has developed a new platform that quantifies online and social media data about your business into a single score that you can track over time. The score is plotted on a three-month rolling graph comparing you against others in your sector, making it much easier to view and report on reputational trends and benchmark performance against your peers.

    You can analyze in depth the data on individual risk topics and drill down to view the conversations that lie behind any spike or dip in your RBI score to gain a clearer picture of where risks might emerge.

  2. 02

    Crisis consultancy

    We help you establish a plan of action, respond and recover quickly and minimize reputational damage.

    • Crisis communication: Every minute counts in a fast-moving situation. We’ll arrange and pay for crisis consultancy experts to support your response during an event and your recovery afterwards, including post-event public relations costs.
    • Brand rehabilitation: We understand it can take time to rebuild trust in your brand, so our solution includes promotional and advertising costs for brand rehabilitation and revenue recovery.
  3. 03

    Risk transfer and mitigation

    We help you manage the financial impact of reputational risks.

    • Profit protection: Working with Liberty Specialty Markets, a leading global insurer with a strong financial rating, we can cover you for loss of gross profit as a result of named reputational risks. We can arrange up to $50 million of aggregate cover for critical costs such as losses suffered while your business is interrupted.
    • Interim claims payment: The insurer will pay a proportion of the loss immediately, so that you can cover critical expenses right away because in a crisis, you can’t afford to wait for your claim to be processed.
  4. 04

    Quantifying your reputational risk

    We help you establish an evidence-based value for your reputational risks based on the potential damage that could be expected to follow incidents most relevant to your business.

    Our Reputational Risk Quantification model eliminates the guesswork, helping you measure an appropriate and cost-effective program of risk transfer and management.

Example scenarios

Airline attracts public criticism

The situation

A global airline attracted public criticism after its crew stopped a customer boarding a flight. The customer, was wrongly thought by staff to have pushed one of their colleagues. Other passengers filmed staff refusing to board the woman. They posted the videos to social media saying they were shocked at her treatment by the airline.

The videos went viral, leading some people to say they would boycott the airline. The airline issued a statement to the press but was seen on social media as striking the wrong tone. Customers began to book with other airlines as the social media backlash grew.

How we could help

In such a scenario, we could help the airline recover. Our reputational crisis insurance includes a “customer abuse” provision in the standard wording that covers the reputational costs of adverse publicity caused by the mistreatment or abuse of a customer by an employee. This includes loss of gross profit as a result of the reputational damage, as well as the cost of crisis communications and brand rehabilitation.

Safety incident at tourist attraction

The situation

A high-profile tourist attraction hosted a carnival. A ride malfunctioned resulting in dramatic images and videos on social media. While no one was seriously injured and the media fairly and accurately conveyed that message, more people saw the social posts without any context leading to rumors and speculation that people were severely harmed or even died. The bad publicity resulted in the early closure of the carnival and reduced ticket sales for the tourist attraction.

In this scenario, the attraction’s public liability and property policies would cover all third-party costs. But those policies won’t cover the potential losses and costs caused by the reputational fallout from such an incident.

How we could help

We could help the attraction recover. Our reputational crisis insurance solution includes a “bodily injury” provision in the standard wording, which covers first-party reputational costs related to adverse publicity caused by a significant bodily injury event. This includes loss of gross profit as a result of the reputational damage, as well as the cost of crisis communications and brand rehabilitation.

All names, characters, and incidents portrayed in the case studies are fictitious. No identification with actual persons (living or deceased), places, buildings, companies, entities or products is intended or should be inferred.


Reputational Risk Quantification Model

Quantify, manage and mitigate reputational risk more effectively with our robust framework.

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