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Brands Can Now Buy Insurance to Protect Themselves If a Celeb Spokesperson Goes Nuts

Former West Coast Editor
3 min read

Michael Phelps, the most decorated Olympian of all time, is world-renowned for his beast butterfly stroke, but he’s also known for his puff-puff pass. After a photo of the “Baltimore Bullet” ripping a bong-load of pot surfaced in 2009, the brands he stumped for took a big hit, too. Phelps’s endorsement deals with Kelloggs, AT&T and Rosetta Stone -- poof -- went up in smoke.

And who could forget bad boy Chris Brown? The R&B star’s endorsement deals with Wrigley chewing gum and the dairy heavies behind the iconic “Got Milk?” campaign evaporated like a milk moustache after Brown pleaded guilty to assaulting Rihanna. Then there’s baller Kobe Bryant and his notorious post-rape accusation endorsement meltdown with McDonald’s and Ferraro’s Nutella brand. And the list of celebrity sponsorship crash-and-burns goes on.  

No matter how much money they throw at them, and try as they might, companies simply cannot control their celebrity spokespeople. They’re humans, born to make mistakes. But now, thanks to American International Group (AIG), businesses can have a little more control when their high-paid mouthpieces publicly freakout or otherwise behave like boneheads -- or, yup, even when they kick the bucket.

Related: The 11 Must-Use Social Media Strategies to Expand Your Brand

It’s somewhat comically called Celebrity Product RecallResponse, AIG Commercial Insurance’s new celebrity endorsement cover-your-ass insurance. A security blanket, if you will, “designed to help customers respond to risks from a celebrity endorser’s public fall from grace, scandal, or unexpected death,” according to an AIG statement unveiling of the product today.

Translation: When a famous spokesperson goes off the rails on the crazy train -- or, God forbid, expires -- RecallResponse-insured brands can collect on the policy and, who knows, they might also save some face in the process.

The unusual coverage -- available with standalone policy limits up to $5 million, or by endorsement with limits up to $1 million -- reimburses companies for costs stemming from yanking applicable products and packaging, along with their “transportation, disposal, or destruction.” It also helps stop their wallets from hemorrhaging when they further erase their association with naughty celebs, you know, when they forever scrub away marketing and advertising materials tainted with their shame spiral-inspiring images.

“In this age of social media and instant news, reports of indiscretions by celebrities or high profile athletes can spread worldwide instantly, with swift, adverse implications for products or brands associated with the individual,” Jeremy Johnson, CEO of Lexington Insurance Company noted in AIG’s official announcement. Yeah, no kidding. Understatement of the decade. 

Related: How Tony Hawk Skated Past Rookie Business Mistakes on His Ride to Success

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