Munich Re Facultative & Corporate (F&C)
Reputational risk covers for commercial businesses
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Reputational risk covers for commercial businesses

Insurance covers to individual scenarios for companies that seek financial resilience in the face of reputational risk.

Our reputational risk protection covers your greatest asset – your name

Reputational risks rank among the top 10 global business risks. A faulty component, a hacker attack, misconduct – the consequences of events that damages a company’s reputation can be devastating. And it can happen to any company, from car makers to a food manufacturer to airlines.

The good news: reputational damage is quantifiable, which in turn makes it insurable. An insurance covering reputational damage generally covers the company’s loss of profits and offers financial support for crisis management and efforts to restore its image. The policy provides indemnification for forgone forecast sales growth, giving a company more certainty for its planning. The insurer verifies the sales forecasts by comparing them with performance to date. Reputational damage resulting from cost savings leading to lower quality, fraud or other intentional acts is, of course, not covered.

value impact
According to an analysis of 125 reputation events, conducted by Aon & Pentland Analytics, the widespread use of social media is accompanied by a doubling in the impact on shareholder value from 2000 to 2018. (Source: Aon & Pentland Analytics)

Reputational risk protection can mitigate the impact of cyber attacks

Cyberattacks not only often lead to business interruption and the associated revenue losses – they also damage the enterprise’s reputation. The fall in sales resulting from a successful cyberattack, however, is not deemed to be a business interruption.

New cyber risks are no insurmountable obstacle but the reputational risks involved require defined loss triggers. The challenge in this coverage concept lies in defining appropriate loss triggers and giving prior thought to loss adjustment policy – a challenge Munich Re is happy to tackle with tailored solutions.

Components of our reputational risk cover

Incidents that spark a reputational crisis can occur in almost any area of the organisation. This is why our insurance solution provides cover for any activity in your company related to business or clients. It even covers allegations.
  • First trigger: An incident affecting your company's reputation occurs
  • Second trigger: The media pick up the issue and report negatively about your company
  • Third trigger: Your turnover/revenue drops significantly

Either all operational triggers can be covered, or cover can be limited to defined incidents of particular relevance for the company. For example, a food manufacturer operating only in certain markets could take out a policy covering only product defects (Trigger 1) or a cover limited to certain media and markets (Triggers 2 and 3)

  • Your turnover/revenue drops significantly
  • A loss adjuster determines which part of the reduction in turnover/revenue is attributable to the reputational event (by excluding other factors that might have impacted your turnover/revenue at the same time, like an economic crisis)
  • The drop in profit is determined by applying your gross profit margin to the reduction in turnover/revenue. We indemnify financial loss on the basis of your drop in profit and the loss adjuster result
  • The scope of cover can be individually specified
  • The timeline to measure the drop in profit can be agreed upon individually
  • Further customisation is possible to best cover your specific situation

Your benefits in a nutshell

Greater resilience
An insured company has a better chance of surviving a crisis with the lowest possible financial damage.
Stronger risk management
The analysis of the potential risk scenarios with the insurer often in itself leads to an improvement in risk management.
Leeway for stock price protection
The added security of claim funds adds breathing space for forging a response strategy to mitigate the value impact of a reputational crisis.
Flexibility in response
Funds from the insurance claim can be used to restore the company’s reputation.


Why you should talk to us

Your situation

  • You are active in a competitive (global) environment
  • Your company is subject to 24/7 media and consumer attention
Your motivation
  • Your success depends essentially on your brand name and reputation
  • You want to protect your balance sheet in case of a reputational event

Get in touch

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Christian Höft
Head of New Risk Solutions
Martin Will
Martin Will

About Munich Re Facultative & Corporate

This solutions is provided by Munich Re Facultative & Corporate. Munich Re F&C bundles the worldwide facultative & corporate business in one unit. This gives us even more power to serve our clients and brokers to sustainably expand and accelerate the insurance industry - while allowing us to explore new opportunities beyond our traditional business.
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