Crisis Insurance: When is it Needed for Your Business?
In a recent article, a new product “Crisis Tether” was announced – available for tourism-based companies, including those with 500 or fewer employees. For years, travelers have been able to purchase insurance policies to reimburse or pay for services if individuals hit a problem – big or small – in their travel arrangements. But this insurance is for the companies providing services to travelers.
“The global tourism industry is a mess right now. Recent terror attacks have made consumers nervous. The U.S. State Department has issued a nearly unprecedented, totally useless worldwide travel advisory,” says Checkmate Public Affairs President Jeff Chatterton. “We grew tired of seeing that suffering. So we created Crisis Tether to make that expertise available to smaller operators, too.”
The new product uses a model many insurance companies use when dealing with small companies or individuals, banding them into a larger group to spread the risk across a broader base and keep the policy costs down.
But this new product brings to mind another question, what other types of businesses might benefit from a similar type of coverage. For example, agriculture-based businesses or those using agricultural products – keeping in mind the scares faced by Chipotle and Blue Bell during 2015 with widespread shutdowns of plants or locations while the Health Department determines the source of problems.
Corporate America has used crisis insurance for decades, but the nature of crises has evolved with the internet and social media. Crisis insurance used to be for situations when a key team member was not able to continue working or a natural disaster shut down operations. More and more crises are about public perception and even one small wrong step in the public eye can cripple or kill a business.
In agwired.com, Eileen Wixted, CEO of Wixted & Company, a PR firm specializing in reputation and crisis management, said, “Your brand, your reputation, your relationship with your customers, your ability to continue to be successful, frequently hinges not only on your operational excellence, but also on how people feel and what they believe about your company. Having a crisis communications plan in place allows you to be able to execute and implement strategies when the unthinkable happens. It really should be viewed as a must have business plan.”
Even if there’s no insurance available, companies should have a crisis management plan for how to proceed, sample press releases ready to go with just a few specifics added, spokespersons assigned and prepared for the possibility. Don’t be hit with the worst moment scrambling to figure out what to do, plan for it, prepare for it. If the worst never happens, that’s good. But if it does, don’t let it catch you off guard.