“Nir Kossovsky, co-founder and chief executive at reputation insurance firm Steel City Re, says a so-called vicarious risk, one that impacts a broad swath of individuals, products and companies, is the “reputational peril of the innocent.” Such risks, which affect a company going forward from a crisis, require executives and board directors to be proactive and to analyze the issue through the lens of various stakeholders, he says.”
Agenda/Financial Times Service
April 25, 2019
“Nir Kossovsky says a so-called vicarious risk…is the ‘reputational peril of the innocent.’”
Reputation insurance validates a company’s governance processes to protect the innocent.
Reputations are valuable strategic intangible assets. Threats to these assets⏤ enterprise reputation risks, often mislabeled “brand risks” ⏤ need to be managed, and management needs to be overseen through reputation risk governance lest reputational damage or reputational harm result in long-tailed go-forward losses in economic value and/or political power. Because these intangible risks arise from the interplay of stakeholder expectation, experiences, and media amplification, parametric insurances for intangible asset risks, for reputational value, for reputational harm, and for reputation assurance help mitigate risk by telling a simple, convincing and completely credible story of quality reputation governance to stakeholders. This story telling effect is the expressive power of insurance complementing insurance’s better known instrumental power of indemnification.
Risk management, risk financing in insurance captives, and risk transfer through reputation insurances comprise the constituent elements of a comprehensive solution.
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