Cyber attack cover

It is every company’s worst nightmare. Last year two Domino’s Pizza employees, American teenagers armed with a camcorder and a bad attitude, recorded themselves running amok and ruining food before posting it on video-sharing site YouTube. Within hours the clip went viral, sending a clear message to companies – social media does have the potential to damage a brand.

Potential damage caused by social networking websites is something that keeps company executives up at night, Aon national general manager, corporate risk services, Paul Venning says.

In the past 12 months, he says, there has been an increase in demand for insurance coverage to protect the brand damage and reputation-related risks of social networking. He says Aon is in consultation with underwriters and social networking risk management consultant SR7 to develop a new form of social media protection insurance. Only the Lloyd’s market in London offers such cover.

“There is clearly a significant increase in the amount of information around social media about organisations, and not all of it is good. In fact, I think most people only want to make mention of organisations in social media when it’s bad news,” Venning says.

Development of the insurance is still in its infancy, he says, because underwriters need to ascertain how they can measure the risk. Local insurers have traditionally been slow to develop new types of cover for risks such as cyber crime.

“Because it’s an intangible asset it is difficult to measure and that’s where the development is taking place.”

BRW

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