Reputational Harm Will End Up Costing You
How can business owners best protect their companies? You may have heard the most common small business claim is theft. This is true, but it’s not the most costly one. Reputational harm claims top this list. These claims include libel, slander, and violation of privacy.
The average cost for these claims is $50,000. If the claim involves a lawsuit, the price skyrockets. Costs to defend and settle the suit raise the average cost for these types of claims to more than $750,000. Typically, around one-third of all general liability claims result in a lawsuit. For small businesses without proper coverage, these suits can prove devastating.
Of course, the preferred solution is to avoid these claims altogether. To protect your business from reputational harm claims, take the following precautions.
Ask permission, not forgiveness. Would you like to post photos on your website or use them in your marketing materials? Do you plan to use a quote or other content for your next marketing campaign? Before you launch your initiative or post your social media blast, get permission to use these items. Copyright and privacy suits can prove costly. Obtain written permission to avoid reputational harm claims. Additionally, ensure all employees are aware of your permission policies.
If you can’t say something nice… Cutthroat competition can make criticizing competitors a tempting tactic. Don’t do it. When speaking publicly or with customers, avoid criticizing competitors. If you never say anything negative about them, they will not have any ammo to use for a slander suit.