This paper extends the CSR-as-reputation-insurance literature (i) by showing that negative public exposure in relation to CSR issues is one of the triggers of reputation-insurance investments and (ii) by providing a theoretical model of a company’s response to its own and its industry peers’ exposure where these investments also aim at reducing the likelihood of future exposure. A dynamic panel data approach that relies on a sample of the 350 largest British companies provides a clean causal estimate of the positive effect of negative exposure in the environmental dimension on the company’s environmental performance, both when a company or one of its industry peers’ is exposed, providing empirical support for our theory. We discuss how this paper bridges the CSR-as-reputation-insurance and the private politics literatures.