We are beginning to see the public being willing to open up to the importance of reputation management. Some universities are now providing their students with assistance in protecting themselves online. It seems now that insurance companies are also getting the mix, putting together policies to assist their clients. Last week,  “Reputational Risk Policies” were deemed by the Insurance Journal as one of the Top 10 Hot New Markets in the insurance field.

It’s an interesting development, as with the advent of the 24 hour news cycle and social media, now at least five insurance firms are offering policies in upwards of $100M for protection in the case of a reputation attack. One well-known global firm, Allianz, has come out with a product called Allianz Reputation Protect. If an event does take place which attacks the firm’s reputation, the policy will cover all fees from the holder’s choice of three public relation firms.

“Trust, reputation and brand strength are precious assets for companies today,” says Joachim Albers, Head of Product Development Financial Lines at Allianz. “We can help companies respond to crises in a professional manner.”

Upon signing the policy, Allianz will visit the company, perform a full analysis, and determine how the company is perceived by their customers as well as the public. In essence, Allianz is attempting to get their customers to partake in a form of proactive reputation management up front while protecting themselves with a policy in case their reputation is tarnished and they have to move quickly to implement a crisis management plan.

It should be understood that these policies mainly protect a firm in the case where there are major events that hurt a reputation, such as the BP oil spill, or when the gas pedals on may Toyota automobiles were sticking to the floor. That said, social media still plays a substantial role in the need for a policy by speeding the way information is disseminated to the public, said Dr. Deborah Pretty, a principal at Oxford Metrica who assisted AON in putting together their their Reputational Risk Plan & Policy.

“Social media has shrunk the timelines,” which “are now much faster and more global.” A company can either “be a winner, or a loser.” she said

The CEO of AON, Greg Case, agrees as to the need of reputation management for firms based on the below data:

 “Eighty percent of Aon’s business clients will suffer an event that will cause them to lose more than twenty percent of their value every five years.” he said.

With information like that, it couldn’t be more clear that companies need to take a hard look at where they stand with their reputation management, and what they can do now to begin to plan for events in the future. There are going to be issues that happen that are very difficult to plan for, such as the RIM network outage in 2011, which can dramatically affect the public perception of a company. However, having a well thought out plan in place ahead of time puts your company in a much better position for when it is time to react. It is not only important to decide how you will communicate with your customers in the case of an unforeseen event, but having a plan as to handle social media channels is now more important than ever.

If we needed another validation as to the need of reputation management, seeing that five global insurance firms have created policies to protect their clients from reputation issues should tell us the significance of having a reputation management plan included in everyone’s business strategy.