On the Web
Need for online reputation insurance
As a rising trend, people are not anymore asked to provide job references or background information. Instead, they are instantly searched for and investigated on the internet.
Interestingly, not just individuals, but almost 90 percent of consumers research companies online before doing business with them. If the search turns up news reports, legal filings, embarrassing photos, or other questionable material, the opportunity is likely to get passed over.
If a company’s reputation takes a nose dive online, it has a real chance of going out of business. Reputation is the most important asset a company possesses. The Economist Intelligence Unit has found that 75 percent of a company’s value is tied up in its reputation. When a company’s name gets tarnished because its executives are scandalized, a disaster occurs, or workplace conditions are criticized, revenue falls, the stock price slides and the acquisition of new customers slows down.
Today, reputation lives on the Internet. More than 90 percent of consumers use the web to research companies and products before buying and 80 percent make decisions based on what they see online. If a disgruntled former employee is slandering the business online, customers would not take the time to evaluate the company’s products further— they will most likely prefer doing business with the competitors.
There are two kinds of reputation insurance that can be of importance to the business’ online presence. The first is “informal insurance”; building up digital reputations before problems occur by making sure companies control the top 20 Google results for their names and own the Twitter, Linkedin and Facebook accounts for those names. Businesses manage their reputations proactively by making sure the Internet accurately reflects their offline successes. When such companies suffer Internet attacks, they already enjoy “prophylactic” layers of technical protection.
The second is “formal insurance” - a legitimate insurance policy, like people would get for their car, health or life. It is different than the service that will protect the first few pages of Google from negative content from being exposed. Reputation Insurance is very similar to Errors & Omissions ( E& O), professional liability or anything else that protects a company. Over quite some time now, a growing number of organizations have been demanding dedicated reputation insurance products in the same way they buy Errors & Omissions insurance, data breach insurance and professional liability insurance.
Businesses and individuals at risk of being maligned on online forums, social media, blogs and websites should look into buying insurance specifically intended to guard their reputation on the Internet.
Experts are curious to find the evolution of a big online reputation insurance market, which not only appears to be smart but also inevitable. But apprehensions exist over the industry of reputation insurance to be a little more subjective than what E& O insurance is, which may make it difficult to draw the line, once the money starts coming in.