The scandals that hit athletes Tiger Woods and more recently Wayne Rooney sent a loud warning to companies that pay millions of dollars for big-name endorsements: no pitchman is immune to embarrassing and costly meltdowns. For many firms anxious to avoid a marketing black eye, the answer is “disgrace insurance.” Insurance brokers say in the past few years there has been a marked rise in the number of firms seeking to guard against losses stemming from misbehaving spokespeople, reports the Independent.
Disgrace insurance can cover lost sales and lost ad campaign expenses (Rooney was dumped from Coca-Cola ads this year following reports that he cheated on his pregnant wife with a prostitute). It can also cover crisis management fees incurred from the fallout of Woods-like marketing messes. The policies cost as much as one per cent of the amount being insured. But with tens of millions of dollars on the line, firms are finding there is such a thing as bad publicity.