"Disgrace Insurance" Protects Companies from Train Wreck Celebrity Ambassadors

Companies are increasingly interested in "disgrace insurance," which protects them when the celebrities who endorse their products crash and burn.

One of the odder aspects of our fame-obsessed culture is that even though celebrities occupy aspirational positions in our lives—in that we project ourselves into the glamorous worlds they inhabit—we never the less take perverse pleasure in watching them crash and burn.

But not everyone enjoys a celebrity train wreck, least of all the companies who pay actors, athletes, models, pundits, and socialites to endorse their products. Hence the rise of so-called "disgrace insurance," which covers companies who want to distance themselves from brand ambassadors who get themselves into trouble. The Independent reports:

The policies – usually referred to as "death, disability and disgrace" clauses – have been around for decades but insurance brokers say there has been a significant rise in companies claiming for losses through disgrace.

"There has definitely been an increase in interest over the last few years," said Mark Symons, an underwriter at insurance provider Beazley.


After Tiger Woods crashed his car in an (allegedly) pill-induced stupor and got beaten by his wife for flagrant (and much publicized) philandering, he reportedly lost some $20 million in endorsements. It took years for Kobe Bryant to regain sponsorships of Sprite, Coca Cola, and Spaulding after he found himself on trial for the rape of a woman in Eagle, Colorado—even though those charges were eventually dropped. Then there's the British soccer player Wayne Rooney, perhaps the most recent example of an athlete to lose an endorsement after a sex scandal. And that's just sports—Hollywood is its own beast.

Granted, as Freakonomics notes, there are some cases in which a celebrity with a taste for wild nights might befit a company's image, but that's probably the exception to the rule.

Does a focus on "disgrace insurance" signal yet another death knell for privacy in the modern age? Or is it merely a requisite safeguard for companies that trade on associations with personalities?

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