Why reputational insurance is so important for food producers
Published 07 February 2019
Reputational insurance cover is more important than ever for food producers thanks to regulatory and customer changes, as your reputation is what makes people buy your products, a Gallagher specialist says.
Stephen Elms, National Head – Food Production at Gallagher, says that stand-alone reputational insurance cover is important for food producers as they face a number of challenges on different fronts.
“Whether it is customer complaints on social media, responding to something like the strawberry crisis or an environmental or data breach issue, food producers should look to use reputational insurance to help re-build their brands if something should go wrong.”
Stephen Elms, National Head – Food Production at Gallagher
“The industry is well aware of the impact a negative reputational event can have on a brand following the Nanna’s/hepatitis recall of several years ago.”
In 2015 Nanna’s Berries, a Patties Food brand, saw its reputation tumble following a product recall which linked berries to an outbreak of hepatitis A in New South Wales and Victoria.
In the Allianz Risk Barometer, an annual study on the biggest risks facing business sectors, food producers named loss of reputation or brand value as the second biggest risk facing their industry.
Reputational insurance can provide cover for a variety of threats, such as:
Negative mainstream or social media coverage
Poor risk management or food safety practices
Data and security breaches
Associations with external third parties that bring your brand into disrepute
It is inevitable that a loss of sales and profit will occur after an event or adverse media report as has been seen for companies as wide ranging as Malaysian Airlines, Target and Volkswagen.
Reputational insurance protection
Reputational insurance provides benefits to assist companies that lose business or share value in the event of a reputational event. It can also be used to engage a team of specialist crisis managers to help guide your business through the aftermath of an event to limit the damage to your brand or business.
From a regulatory perspective, the Food Standards Act adds pressure from a reputation perspective. Any issue with food needs to be notified in the public domain which can bring a negative impact on a brand.
“A good brand is so important as competition within the industry continues to rise,” Elms said. “For food producers, reputational insurance can help protect them and provide stability in the face of a crisis.
Talk to our experienced food production insurance experts
Specialised industry knowledge means a food production insurance expert can identify the potential risks presented by the processes involved as well as the roll-on effects, such as the need for product recall, and collateral damage, to reputation, for example, and formulate a risk management and insurance cover program accordingly.
Our team of food production specialists calls on the Gallagher legacy of 75+ years in servicing food production enterprises, which means that whether you are a primary producer, in processing, transit or grocery wholesaling, we have deep understanding of the risks associated with each step of the supply chain and how to manage and mitigate them.
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