Insurance & Reputation: 5 Ways Insurance Protects your Business

Insurance & Reputation: 5 Ways Insurance Protects your Business

Business reputation and strong branding go hand in hand. With 63% of your business market value being attributed to your corporate reputation, maintaining a solid reputation as a business and with your consumers is crucial.

While technology has been very beneficial in almost every element and practice of your business, sentiment and reputation remain fundamental for success. Technology also means that maintaining reputation is no longer as straightforward as simply having a transparent business strategy that treats staff and customers well.

Now, in an era where cybercrime is rife, businesses have many new and confusing challenges to consider. Suffering a cyber-attack is not only a critical risk for your own business security as well as customers personal data, but it will likely have negative repercussions for your image and reputation. Both your business partners and customers understandably aren’t likely to trust a business that exposes their personal or commercially sensitive data.

When it comes to running a business, your brand and reputation are priceless. So understandably, the small price it costs for any additional security is bound to be worth it. Insurance policies are essential in this technologically centered environment, to ensure some peace of mind, knowing you have the financial backing of an insurance company that can also assist you to minimise any damage to your business reputation.

An insurance policy will provide financial security to enable your business to be more flexible and better accommodate clients and customers in many ways. We have compiled a list of five reasons why the right insurance policy for your business can also help protect your reputation.

1. Recover from Cybercrime

With cyber security attacks and breaches increasing, more people working from home and increasing reliance on the internet for running your business, protecting your business against cybercrime is crucial.

Most business activity occurs using the internet or data storage, making cybercriminals unavoidable, so it’s more a matter of when, not if, a successful attack happens. In fact, over two-thirds of businesses still feel inadequately protected from such an increasingly concerning issue, as it not only affects the company operations, but also the customers.

Common cybercriminals’ tricks are phishing (fraudulent emails) attacks, credential harvesting, phone, text and email scams and fraud, and malware attacks. They are designed to steal money or personal data to prevent you from accessing your systems until a ransom is paid. 

If any of your databases or accounts are hacked, your data and customers’ information will likely be immediately compromised. You will have to notify your customers of the breach, likely to cause great concern. They may hold the business responsible for losing any commercially sensitive data or personal information.  

A successful attack will not only impact the business financially, but it can also have severe consequences for your reputation. Cyber insurance can immediately and effectively help you minimise the likely financial damage, enabling you to focus on talking with customers and restoring your reputation. This insurance will pay for experts to fix the IT system and pay ongoing costs such as wages and net profits.  

Responding to cyberattacks and keeping your business running will require a lot of time and energy. However, managing this key financial risk by investing in cyber insurance will help you reduce the impact and enable you and your staff to focus on managing your business and getting your reputation back on track.

Insurance & Reputation: 5 Ways Insurance Protects your Business
 
2. Managing General Liability

While cybercrime is one of the most recent and common examples of incidents that can result in reputational damage, general liability is another example.

Depending on your business there are many types of risks, such as people slipping over and injuring themselves, damage to customers property, copyright infringement, all of which can damage your reputation. General Liability Insurance which covers both third party personal injury and property damage protects you against both legal costs and any damages awarded by the courts. The insurer will also advance legal and specialists’ costs to help you defend the claim.

Having an insurer that you can count on to provide expert advice and assistance, including professionally dealing with customers and third parties, ensures that you’re not seen as walking away or avoiding any complaints and impact to your reputation. 

3. Professional Indemnity

You may have heard of professional indemnity insurance. If you’re new to insurance, you may not fully know what it protects against or who should have this type of insurance. But if you’re a business owner, this is one insurance you should make a priority to understand. 

Professional indemnity insurance safeguards individuals and businesses that provide professional advice or services that may result in financial loss to a client. For example, an engineer provides incorrect drawings to a builder, and the foundations start cracking, so the builder must repair the building. Professional indemnity offers different cover to public liability or products liability insurance. Unfortunately, unhappy clients or despite all the care in the world, some things can go wrong, resulting in complaints and potential professional negligence claims.

Professional Indemnity Insurance pays your legal defence costs in advance and any damages awarded by the courts. Without appropriate insurance cover, claims of professional negligence can cause serious financial damage and impact the reputation of individuals and businesses. The policy also covers public relations costs to work with you to minimise damage to your reputation, which is why you need Professional Indemnity Insurance.

Insurance & Reputation: 5 Ways Insurance Protects your Business
 
4. The Role of Social Media

Social media is undoubtedly an extremely powerful tool to help connect with customers, extend your reach, and foster closer consumer relationships. However, we have mentioned that operating in cyberspace can come with a downside, meaning not only can you be hacked, but bad publicity can also spread very quickly.  

Quickly responding to criticism and negative customer feedback is extremely important for maintaining reputation. So, business insurance is vital in helping you manage any claims from third parties for personal injury or damage to their property. 

While it is certainly noble to respond according to your own business values, sometimes it’s essential to have lawyers on your side to assist in negotiating with customers. A good insurance policy will provide peace of mind, but it will also help and pay for public relations to quickly deal with the negative publicity spread of social media.

5. Your Business Credibility

It’s not only important to act according to your business principles, but it’s also key to ensure your customers know that you’re doing this as well. 

Having a financially secure insurer standing behind you is not only good for you and your business in the event of a claim, but clients will also find it comforting to know that a reputable insurer backs you. This is good for your reputation and credibility.

Insurance & Reputation: 5 Ways Insurance Protects your Business
 
In Summary

Maintaining your reputation in a fast-paced digital world where everyone has easy access to social media can be challenging. 

It’s easy for a company's reputation to be wrongly tarnished, which can have significant repercussions for your business, staff morale and profits. Business insurance can take the pressure off and help you mitigate any damage from events such as injury-causing bad publicity, breaches of customer privacy or data breaches. 

For more information on how to ensure your reputation can stay intact contact the team at Insurance Advisernet today. Understanding the nuances of business insurance can be overwhelming, so we’re here to make things a little simpler.

Important Information 

This communication including any weblinks or attachments is for information purposes only. It is not a recommendation or opinion, your personal or individual objectives, financial situation or needs have not been taken into account. This communication is not intended to constitute personal advice.

We strongly recommend that you consider the suitability of this information, in respect of your own personal objectives, financial situation and needs before acting on it. This document is also not a Product Disclosure Statement (PDS) or a policy wording, nor is it a summary of a particular product’s features or terms of any insurance product. If you are interested in discussing this information or acquiring an insurance product, you should contact your insurance adviser to obtain and carefully consider any relevant PDS or policy wording before deciding whether to purchase any insurance product.

Cyber Insurance

Cyber Insurance

Technology has never been so deeply entwined in our businesses. While it delivers significant efficiencies and convenience, it also comes with significant cyber risks.

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August 2, 2018

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