Sales and profits that are lost due to reputational and brand damage are an increasing concern for companies and organizations, and some insurers have begun offering coverage that indemnifies financial losses stemming from such a crisis. 

While many insurers offer reputational risk policies that cover the costs associated with responding to a crisis, few insurers indemnify revenue or profit that is lost as a result of the devaluation of a brand or reputation. 

Such losses are attributed to a change in customer perception of an organization's brand that causes lost sales and revenue. 

Lockton's Emily Freeman offers her expertise: 

For such coverage, there is $25 million to $50 million in capacity in the London market, with one Lloyd's of London syndicate already offering capacity while a second syndicate is interested in doing so, said Emily Freeman, executive director of the technology and global privacy group at Lockton Cos. L.L.P. in London. 

"There is wording and there is some capacity in London that we're building," Ms. Freeman said. "It certainly is not a large enough market yet to be a real risk transfer for a Fortune 50 company." 

The coverage is triggered by an adverse media event that affects consumer trust and brand perception. Typically it is written on a named-peril basis and responds to specific areas of brand damage, such as data breaches or the disgrace of a key executive or advertising sponsor, Ms. Freeman said. 

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Emily Freeman
Executive Director
Technology Risks
efreeman@lockton.com