October 1, 2020

Protecting a Non-material Asset: Your Reputation

Written by:
Cate Misczuk
Reviewed by:

You’ve seen the headlines — they no longer only target and tear down the famous. In the internet age, everyone with something to lose needs reputation protection insurance. 

Today anyone can be the target of a negative media campaign. Whether it’s a 140-character, non-fact-checked accusation, or an unfounded lawsuit filed by a disgruntled former household employee, your name or image could make headlines in a matter of hours. However, an attack doesn’t have to mean the end of your reputation.

It is possible to influence or mitigate negative perceptions with reputation management — but these services come at a hefty price. In taking the time and effort to tell your side of the story, sway public opinion, file your own lawsuit, or get negative material removed from the internet, you could find yourself paying hundreds of thousands of dollars out of your own pocket.

That is why today, personal reputation protection insurance isn’t just a good idea, it is necessary. Here, we’ll explain the ins-and-outs of this insurance category — from what it protects you against to how much coverage you’ll get and how you can use those funds to help mend your reputation if the situation demands it. 

What is reputation protection insurance?

While the details of policies differ, in general, reputation protection insurance provides a policyholder with the support of reputation management services after a potentially reputation-harming event or campaign has taken place. That means you’ll have access to services like a PR team and/or crisis management firm to help mitigate the damage caused by negative publicity or litigation.

Here’s how reputation protection insurance works

Let’s say your teenager makes ill-advised statements about their teacher on social media that are later spread throughout the community. Or, maybe there is an accidental injury at your home and the media picks it up because of you or your guest’s prominence. Both these scenarios have the potential to tarnish your reputation with the public.

Our insurers offer coverage up to $250,000 to help you mitigate the damage caused by this negative publicity or litigation. Typically, you can choose your own PR or crisis management firm, but they also can help you secure one if need be. At the end of the day, having this insurance gives you the peace of mind of knowing you’ll be backed by professionals to help you navigate a personal reputation crisis.

Did you know there is expanded defense coverage, too?

At Kelly Klee, we recommend that all successful individuals carry a substantial excess liability policy, particularly since their assets may make them targets for frivolous lawsuits. You can actually extend your coverage to provide more resources to protect your reputation and assets in the event that you are sued.

With a personal excess protection endorsement, you will receive up to $250,000 in expanded defense coverage so that your personal legal counsel can consult with the expert legal team provided by our carriers for a covered liability incident. This extra coverage allows you to have a trusted advisor on the case to assist with the investigation and defense of the suit or claim, providing great comfort during a difficult time. This coverage is in addition to your excess liability policy limits, which are available in higher amounts to protect your unique financial situation.

According to Kelly Klee President Bob Klee, clients often inquire: “How much personal excess protection do I need? An attorney would say $1 more than the judgement, but in actuality, we have a formula for determining a minimum amount of coverage. Everyone has a different risk appetite, but here is the formula that we use:

  1. How much is your net worth today, excluding your retirement accounts?
  2. What is the net present value of your household income over the next 10 years or approximately your take home pay times 10?

The reason we use 10 years is that judgements can be attached to your wages for up to 10 years.” 

As risk managers, we are here to discuss different scenarios to devise a plan that works best for your situation. Call us at 844.885.1600 or click here to begin the conversation.

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