AIG underwrites first online reputation insurance product for small businesses
AIG is underwriting a new online reputation insurance product for Irish businesses, aimed particularly at SMEs.
The product allows businesses to protect themselves against the risk of social media and other online crises.
Negative sentiment towards a business on social media can have a serious and lasting effect on its bottom line. About 64pc of Irish businesses use platforms like Facebook and Twitter, according to Eurostat.
The product is being sold by new company RiskEye. Policy holders have access to an online media monitoring service performed by Cloud90, the company led by 11890 founder Nicola Byrne.
Customers are also entitled to access a legal team and public relations advisors, up to the value of €50,000, in the event that online posts threaten their reputation.
One in ten Irish businesses said they had experienced a social media crisis in the last year, in a survey published in March by Edelman and the Marketing Institute last month.
A fifth said they were unprepared to deal with a social media crisis if it happened.
"A business's reputation is its greatest yet most intangible asset" said RiskEye managing director Declan Kavanagh. "As businesses expand their online activity they also increase the risk of online threats or attacks to their reputation which can potentially lead to rapid and catastrophic loss. The risk posed by employees or customers can be significant and one comment or video clip distributed through social media can change or even destroy everything."
Irish companies who have faced social media crises in recent years include gift voucher supplier One4All.
In 2013 the business was hit with a false and malicious rumour that it was about to close. The rumour was first sent by text message but spread quickly through social media.
Chief executive Michael Dawson said the impact was so serious it would have collapsed a smaller company.
Through speedy action his team was able to correct the rumour and mitigate the damage, he said, urging other businesses to prepare for the risk of online reputational damage.