You have insurance in place in the event of physical loss, but is your business prepared for a security breach or damage to your reputation? In this episode of Risky Business, Colin Rooke emphasizes the importance of working with a team that reviews all facets of risk in your business and will help you build a strong plan.
Listen to the full episode here, or read the full transcript below.
Paul Martin: Welcome to Risky Business Commercial Insurance with Butler Byers. This is Paul Martin. You know me as the business commentator on CKOM and I guess today you’re going to know me in a different context, but we’ll get into that in a minute because joining me, as always, is Colin Rook the Commercial Risk Reduction Specialist with Butler Byers Commercial Insurance here in Saskatoon. We’re going to be exploring this notion that we’ve covered a few times Colin, is the issue of reputation. So you sell insurance policies, but one of the things you cannot buy is a policy to maintain my reputation. But it’s a risk that every business faces every day, from the cyber attack to just employees going sideways to you, to pick a topic.
Paul Martin: There are lots of places where a business who has many agents, if I can use that word, representatives, employees, suppliers, this kind of thing, that represent them on a day to day basis that things can go sideways. Let’s talk about reputation. When you here the word reputation as an insurance professional what’s that meant to you, because it might mean something different than it does to me or to our listeners?
Colin Rooke: When we talk about reputation from our side of things it’s when there is a claim and when there’s any type of loss what’s going to be the long-term impact of that loss. If you’re insured properly you’ll be made whole again, that’s the point of insurance. If there’s coverage available you will be made whole, but not exactly. As you mentioned, there’s no policy that I can sell for reputation risk. Yet, it’s the number one risk in the world today. If you think about it it’s because the impact is so broad. You take any key risk factor that business owners are faced with every single day and there’s always a reputation side to that risk. We talk about cyber crime a ton. The big factor, the main cause of damage to the business is not the physical loss, it’s not the loss files. Yes, it’s costly to notify everyone involved. But, again, as a consumer, if you feel like the business you’ve been frequenting for years was delinquent with your personal information you may not visit that business in the future. That’s the reputation side of things.
Colin Rooke: What if there’s a manufacturing facility and there’s an accident, seven people are hurt on the job, big injuries. Now you’ve got the media talking about that. Again, insurance isn’t your main concern at this point it’s how do I handle this? What do I do here? I’m having a reputation disaster right now. Again, businesses that have a plan for this type of event are, quite frankly, going to come out ahead, they’re going to better off at the end of it than those that haven’t had that talk, which is why we bring it up as often as we do.
Paul Martin: One of the areas that we’ve explored a little bit in previous shows and I guess we’re going to dig into it a bit deeper here today, as you reach out to build your team you have obviously your insurance team, those who are experts, but then you surround yourself with other firms that can provide additional support to your clients along these kinds of lines. Ones of those being Wawanesa Insurance of course has stepped up. They work quite closely with you guys and they’ve become a sponsor of this particular program. They see what you’re doing as being different than others in the market. That’s about how Butler Byers step-by-step risk assessment plan, first I’m going to take a business owner through this questionnaire type scenario, we’re going to identify where you’re strong, where you’re week, and then in the areas where you’re weak we’re going to work out a plan so that we can eliminate those or make you stronger in them.
Paul Martin: Today we’re going to talk about the issue of reputation and how you help companies become stronger in that realm.
Colin Rooke: Exactly. We’ve talked about, okay, so we’ve identified a risk together, it’s part of the plan. We’ve determined that we need to prepare. If we do we are going to become a better risk and we’re going to become a better business as a result. So what do we do? Butler Byers, we are experts at risk identification. We are experts at determining the potential costs to your business. From there, if we don’t have an in-house reputation disaster team what do we do? When we get together and we sit down with our clients, and we work on the plan, and we say, “This needs some work,” when we don’t have the answers we reach out to the market. We reach out to our trusted advisors. We do that a lot. We require those trusted advisors to sit down with their clients, discuss the need in further, and if a working relationship ensues from there we’ve done our job.
We are outsourcing the best of the best when it comes to different areas of risk.
Colin Rooke: We talk quite a bit about how often, again, we are outsourcing the best of the best when it comes to different areas of risk. We’ve talked about having vendors on the show. We’re getting a lot closer. In fact, I had a meeting today with another vendor that would like to come on the show.
Colin Rooke: It just dawned on me that two feet beside me there’s an expert in reputation risk and in crisis management. So Paul, we’re going to switch gears a little bit. I want you to talk about what you do and your approach as someone that, again, we would put in discussions with our clients when we determine that this is something that’s going to impact their business.
Paul Martin: Love to do that. Just before we get into it, and we’re going to talk about my role, which is additional to the stuff that you’ll hear me on the radio which is in the realm of public relations. That’s why we’re going to dig into it, but one of the reasons you do this, and the reason we’re having this conversation is that you put this team together. You surround yourself with this group of experts as you call them that guide you or provide some level of assistance to your clients, but when you take that back to the insurance companies that you’re saying, “Here, right a policy on this company on my client,” how do they view that when they see you come in with here’s the step-by-step guide, so here’s where my client is weak, here’s where they’re strong, and here’s how we’re fixing the strong parts, how do they great that? How does that insurance company look at it?
Colin Rooke: When we had that story, when we say we’re discussing risk with our clients and we’re working on it. It’s all about shedding the clients we work with, the businesses in the best light possible. When you have that plan you are going to see favourable terms and better coverage to the point where I’ve been asked to speak to underwriting staff explaining what we do and how we do it, and the why, to just better wrap their heads around on every risk we place, on all new business, we really have to dig deep. They’re recognizing that those applications aren’t good enough either. So to be asked to say we’ve got a team here and there’s dozens of underwriters, from junior to senior, we want your help to just … You’ll get them thinking differently like you do, that’s huge progress in our industry.
Colin Rooke: When we say, “Look, we’d like you to place coverage for this business,” and look at all the great things we’re doing. We’ve said at the end of the day they are gambling on whether or not you’re going to have a loss, information is key, the plan is key, and just showing the work that we’re doing is key.
Paul Martin: All of this work leads to preventing a claim, right?
Colin Rooke: Exactly, yeah.
Paul Martin: You’ve described it I think in earlier programs of insurance companies want to write policies on the best of the best, the best in class companies. That’s what your program is designed to do is to turn my business into best in class for when you present to the insurance underwriters, so you get me the best policy at the best rate.
Colin Rooke: Yeah, absolutely. Every meeting in the boardroom when the company reps come by they start with discussing who they want to write, what business they want to see, and they always say best in class every single time and who wouldn’t? They’re not going to come to our office and say we want the claim’s ridden businesses that you probably don’t want yourselves. It’s give us the best. Don’t move accounts that aren’t good to us. Why? Because they don’t want to pay claims and not make sense.
Colin Rooke: If we can articulate that by way of a plan and really quantify the work that we’re doing we can show you asked for best of the best, this is it. If we’re not there yet we’re working towards it, but at least you know we’re doing something.
Paul Martin: All right, we’ve got to take a little break and we’re going to come back and dig into the reputational piece that we alluded to earlier. You’re listening to Colin Rook, the Commercial Risk Reduction Specialist with Butler Byers Commercial Insurance. This is Risky Business back in a moment.
Paul Martin: Welcome back to Risky Business. This is Paul Martin sitting in with Colin Rook the Commercial Risk Reduction Specialist from Butler Byers. Today we’re going to do something a little bit different.
Paul Martin: You know Colin, since we started this show a couple of years ago I’ve always sort of said one of these shows we should turn this around where I’m the guest and you’re the host because we’ll just see whether or not I’ve learned anything in all of this. Actually, today we’re going to talk about how your firm and my public relation’s firm are collaborating on some of this work. Just set the tone and then I can fill in a little bit of the gaps.
Colin Rooke: Sure. Hope I can do this justice. Again, we’ve talked about wanting to have a third party vendor on the show. The work you do at Martin Charlton Communications on the PR side is exactly what we’re talking about on damage control on the reputation risk management side. For anyone that’s worked with us on a disaster recovery plan or if we’re talking about cyber crime preparedness there’s always a public relations component to those plans. So there’s been a problem, great. We know who we’re going to go to. We know what the employees are going to do. We know what vendors we need to call, what suppliers are key customers and clients. But on every plan there is an okay and who’s going to talk to the media? Who’s going to smooth over what happened?
Colin Rooke: A big part of what we do is just reaching out to our trusted partners and offering advice and some coaching. Who better to talk about PR than a PR expert, so I thought maybe Paul you can elaborate on the work that your company does and educate the listener on that.
Paul Martin: Absolutely. I guess from a commercial sense, think of it this way, a business owner you drive up to your office in the morning and the police cars are surrounding it, that is the worst case scenario where something has gone down and your staff has-
Colin Rooke: There’s a shooter or something.
Paul Martin: Yeah or somebody’s been arrested or there’s been some kind of a security breach, or something like that. Then you show up and you’re confronted with you’ve got the business problem, but all of a sudden the networks are there and the TV cameras are in your face. You don’t really know what’s going on. The whole exercise of what we do is just as you prepare plans that are disaster recovery, you try and look at scenarios, we in the PR world do exactly the same thing. We prepare communications plans, crisis communications plans where we try and anticipate potential problems, then we help prepare the client for the onslaught that’s coming. Most of it is explaining how the process works. Most of us don’t know how the media works so we have no understanding of what that is. It’s this gray world and we try and take that grayness away and make it just a little bit clearer so that the mystery of what’s going on goes away, you can actually deal with the issue rather than the events going on around you, the context.
We prepare communications plans, crisis communications plans where we try and anticipate potential problems, then we help prepare the client for the onslaught that’s coming.
Paul Martin: We do things like media training. We actually put people through we’ll roll cameras, and we’ll videotape them, and we’ll do mock interviews with them so they understand this is what it’s going to be like in front of the media cameras. Then we can play them back in a safe environment and say, “Here’s where it’s strong, here’s where it’s weak.” We help them to develop speaking notes, speaking points, things they want to talk about.
Paul Martin: Here’s the funny thing that happens inside of a company. Often the CEO is the one who’s doing the speaking. But many people in the organization answer the phones, so you’ve got to have those speaking notes in front of everybody in the organization so that the staff knows how to actually handle inquiries. Media people, folks like us, we’re really sneaky sometimes. We don’t just phone the boss, we’ll phone the secretary and ask for some support or some answers. If they haven’t been guided they really don’t know how to-
Colin Rooke: Say the wrong thing.
Paul Martin: … handle … So this is a part of the overall preparation that might be involved in getting a communications plan or a crisis communications plan together. Sometimes you don’t even get a chance to contemplate a scenario where if the building’s on fire, for example, or something, the owner of the enterprise has some priorities here, is all the staff safe to start with. Then is there danger to other buildings? Are there any dangerous goods in there? These kinds of things that are going on. The media is there asking a lot of questions and in a way you don’t have time to get that preparation together. That’s where the support of some professionals can help a business owner make sure you don’t, A, say the wrong thing, create the wrong impression. Really just the worst impression you can create is no comment. Anyone who says, “No comment,” what do we immediately believe? They’re hiding something. You do have to be forthright. These are your neighbours, your community, other people in your community, you have to tell them what’s going on. They expect to be able to know and so you need to be in a position to explain yourself and to be able to do it in a cogent way so that you don’t damage your business even further.
Colin Rooke: You made a really good point about media being sneaking or the secretary example-
Paul Martin: Yeah, that’s a good point. Yep.
Colin Rooke: We do the same. We talk about educating the staff. When it comes to a computer virus it’s usually not the IT department letting it in, it’s someone that’s been forgotten. A really important piece of the puzzle for the business, but management will usually have some cyber training or even disaster recovery training. They have the plan, the problem is, they didn’t share it. It’s a really good point to say we have to get everyone on board. They all have to have the notes if we are going to navigate this together.
Paul Martin: You know Colin, we’ve had clients that we’ve worked with over the years where we’ve staged mock disasters within their organizations and we get to create the parameters around this. I remember one we did some years ago where we said there was a fire in the building, there was some dangerous goods there, there was an employee, and this was all mock. None of it really happened. There was an employee who lost a life, and there were fire doors. They had come down and an employee was trapped inside. Now we had the employees’ family arriving at the scene and we had to cope with them. Because there was dangerous goods in there there were fumes to be dealt with. We were tracking the performance of the senior management team to see how fast they called the mayor, how fast they called the Environment Department. We had set up mock numbers that they would dial and all of this. Then we could do a debrief after and say, “Here’s where your strengths are. Here’s where your weaknesses are,” in the same way you do your step-by-step plan we did a step-by-step plan too. We were able to then say to the company, “I think if we shore this up this is good, but if we shore this part up you would have a better plan and it would be more favorably welcomed by say the fire marshal or something like that.”
Colin Rooke: Let me ask you, if it’s anything like our line of work, so the point of our risk reduction work is to be proactive. We don’t wait until the disaster strikes. We have a plan in place prior. When it comes to the communication side, when do you find that you’re being contacted versus when should you be contacted.
Paul Martin: Yeah it’s a very good.
Colin Rooke: I think I know the answer but-
Paul Martin: Yeah, it’s a very good point and thanks for teeing it up so nicely. Obviously we get called when a disaster is on it’s way or is under way. It’s hard to put the genie back in the bottle. Obviously you want to get it to it before. You can’t prevent disasters with communication’s plans, but what you can do is give a company or a corporation the tools to be able to cope with it, to make some preparations, and probably working hand in hand with her insurance broker, working with you, for example, we could identify some additional risks. Your disaster plan and prevention plan actually gets bolder, stronger, and more airtight as a result of it.
Colin Rooke: If it’s anything like, again, when we talk about disaster recovery planning, when it comes down to costs, and money is important, if the … really, it’s the reason why we do this work. If the business owner came to you prior and had a plan in place I’m willing to bet overall the cost of the disaster would be less if there, again, was some proactive work as opposed to there’s been an accident, we need people on the ground now. We don’t know what we’re doing, roll it out, versus we’ve thought about it in a proactive way. We’ve prepped, planned, and we’re ready to go, and we might need some tips.
Paul Martin: That’s absolutely right. It’s the ounce of prevention versus the point of cure. Amazing as this is, the time has scooted by again. We’ve run out of time. So I want to thank you and I want to thank Walanesa, our sponsor on this-
Colin Rooke: Yes, yep.
Paul Martin: … program. I want to thank you, our listeners, for joining us for Risky Business Commercial Insurance with Butler Byers. Talk to you next time.