Crisis Management Cover

Crisis Management Coverage – What is it?

This is Insurance coverage designed to help a business limit the negative impact of events on the business’ reputation.  Crisis management coverage has previously been arranged for larger organizations, however small and medium-sized businesses should consider this too if their profitability is closely linked to maintaining a good reputation.

A company’s reputation is one of their most valuable of assets.  It is difficult to value and often difficult to protect. It can take many years to establish the good reputation of a brand, but it can be destroyed in an instant.  

Thanks to technology, news spreads quickly. Stories can go “viral” thanks the Internet via email, social media, and other websites. This combined with the 24 hour news cycle provided by Television networks and Radio makes it very hard to prevent a bad news story about an organisation causing damage to your reputation.

This cover has mainly been overlooked because the majority of businesses do not face threats to their reputation often. As negative publicity for them is rare, they are often unprepared for this if it occurs. For example, a notice of a health code violation or a food poisoning outbreak can easily spiral out of control. As a result it can severely impact the ability of the business to stay open.

Many Insurance policies offering crisis management coverage may narrowly define the types of events that are covered. Types of events that may be covered include workplace violence, assault, firearm use, food contamination, and workplace accidents. Events may also include credit card breaches or the hacking of a company’s computer network by an outside party. The coverage may be triggered as soon as news of the event is reported by the media, whether in regional forums or national forums. Coverage is usually set for a limited period of time, such as 60 days, after a crisis event occurs.

Policy coverage can include the following:

  • Emergency and crisis preparation
  • Paying for communications professionals to assist the policyholder in identifying and executing a strategy to limit further impact of the event in the media. For example, the business may need to employ a public relations professional.
  • Loss of business income funds for a set period of time.
  • Post-event issues, such as funeral arrangements or counselling for individuals who witnessed or were involved in the event.

The financial and management implications of incidents and subsequent litigation means expert preventative and incident management advice is essential.  It is so important that those responsible in managing a company can demonstrate that they are well-equipped to deal with unexpected crises or emergencies.

A Crisis management solution should make sure there is operational preparedness, minimising business interruption, deal with any image damaging consequences as a result of crisis related loss, and subsequently strengthen your market position.

Some insurers can provide pre and post incident risk management offerings to help our clients reduce exposure to threats and minimise the impact of any incidents on their business operations.

Who can help?

Contact a specialist insurance broker such as Cooper Professional Risks Pty Ltd.

Call CPR Insurance Services.- Experts who will save you.

Latest News

Illegal or unsuitable cladding now a big issue

Why we have laws, regulations and Australian standards? Because some people just do the wrong thing all for the sake of making money. The cladding issue is the subject of 4 Corners program on the ABC.

We are already seeing Insurance policies now placing exclusion endorsements into their policies excluding and claims relating to illegal cladding. We are seeing Governments demanding Audits of all existing buildings above a certain height. There are accusations of Builders taking other short cuts such as on Wiring, Pipes and sprinkler systems. 

The question is, who is to blame? Who will take responsibility?

read more

Small business in NSW

Right after the NSW Government have reimposed Fire Service Levies, they have at least made an effort for small business. The government has announced it will abolish stamp duty on a number of policies taken out by a small business. This is an important change.

What is a small business? In order to gain the exemptions, the business must be a small business for Capital Gains Tax Purposes for the income year in which the insurance is effected or renewed. A small business for CGT purposes is: “an individual, partnership, company or trust that is carrying on a business, and has an aggregated turnover of less than $2 million.”

read more