"One of the biggest problems for companies in today's environment is that control over what is said about them has gone from 'in-house', such as the friendly newspaper editor, to any single one of their customers," said Mr Hoad. "It is a shift in control, and a changing risk landscape."

He said there is clearly a lot that can be done in terms of managing reputation risk. But sometimes things just go wrong and despite trying to manage the risk people may choose to boycott buying a company's products or using their services.

To that end, he said, Kiln has tried to put together an insurance solution, in collaboration with Phil Mayes and clients, to mitigate the risk.

He explained that reputational harm insurance involved a business interruption structure that preserves cashflow in the event of adverse media. And by necessity, it is a bespoke solution that requires in-depth analysis of the scenarios, or perils, that clients think could get into the press and tarnish their reputation-by which he meant sales volume and profit that a client could lose from adverse media.

Mr Mayes described the process of identifying what could impact a business as a 'collegiate approach', in which the insurer, the broker and the client, including the wider organisation, all play a part in looking at potential perils.

Mr Hoad explained that the insurance would involve a direct alignment between something fortuitous and outside of a company's control, the media event itself and the tangible loss of sales as a result of the adverse media.

The trigger is the media that loses you sales. "A company may have negative publicity occasionally, which can impact on reputation, but it may not have a direct impact on sales. I don't think it is the role of insurance to play in the place of reputation in terms of the look and feel of a company, but it is the role of insurance to be there when there has been an income loss," he explained.

Mr Hoad highlighted an issue that he said was one of his 'bugbears'. "Insurers have launched reputation products that require you to use people that they know in a time of crisis. What I don't like is that the insurer runs a risk of getting that wrong, having been forced to use a certain person. But the people that know you best prior to an incident are probably the best ones to respond in a time of crisis. We would like you to involve your own business continuity plans for public relations and how you deal with the media."

The issue of exclusions was raised, and Mr Mayes explained that the policy was written on a named peril basis to get round the issue of having a huge list of exclusions. "When we write a policy on reputational harm, it is very straightforward, there is nothing hidden. This is risk specific and organisation specific cover."

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