Soon Reputation Insurance May Be Available to SMBs

In 2012, Goldman Sachs employee Greg Smith quit his job. Instead of bemoaning his fate in private, Smith wrote a New York Times op-ed piece saying that Goldman’s environment was “toxic” and that the company “sidelined” clients’ interests.

There’s no telling how many people read that piece in print and online, then shared it via social media. And that’s not even allowing for the thousands of words written in post-publication commentaries.

However, apparently as a result of this firestorm, Goldman Sachs experienced a whopping $2.15 billion decline in market value. That’s how expensive damage to a company’s reputation can be.

With word spreading so quickly via social media, it’s now essential for companies large and small to guard their reputations. Although reputation insurance is now primarily accessible to the “big kids” on the playground, it’s worth keeping an eye out, because it likely will be available soon to small and medium-sized businesses (SMBs).

How can an insurance policy put a stop to rumor mills? Most reputation policies provide companies with public relations expertise before something happens, and it covers the costs and expense of anything from recalls to damage control if something does happen. It would not only cover losses like Goldman Sachs’, but also the repair costs, too.

Currently, most reputation insurance products cost roughly $10,000 annually. As business magnate Warren Buffet once said: “It takes 20 years to build a reputation, and five minutes to ruin it.”