Not the fall but the landing that counts
21 November 2008
Recent falls from grace have highlighted the sheer volume of news coverage that celebrity bad behaviour—accidental or deliberate—can generate.
With millions spent on advertising campaigns the consequences of a celebrity’s mistakes can be costly, and firms turn to specialist coverage for protection.
Only if you’d been on a desert island would you have missed two of the BBC’s most recognisable stars, Jonathan Ross and Russell Brand, crash landing over their offensive calls to comedy actor Andrew Sachs.
And in recent weeks former Atomic Kitten singer Kerry Katona caused frozen food firm, Iceland, to ponder over the effect on its brand when she appeared incoherent during a morning talk show guest interview.
Robin Walsh, Production Underwriting Manager at Hiscox, says death and disgrace cover is a specialised product that is being brought into play more frequently as the amounts invested in major campaigns rise.
He explains the policy will cover the money invested in a campaign at the time of the death or disgrace of the celebrity.
“The disgrace aspect is subjective,” he adds. “But the policy wording will cover committing of a criminal offence or actions which can be deemed to be offensive or against public decency.”
Walsh says it‘s the advertising firms that will take out the cover on behalf of their clients.
He also says the risks involved in using a role-model star can be just as great as for a wild child celebrity.
“A celebrity who has a reputation for outrageous behaviour may well be able to get away with actions that would be seen as shocking from someone else,” he explains. “If you have a celebrity who’s perceived as a spotless role model, then they need only do something quite minor for the impact on their image to be significant. In some ways they have further to fall.”
Underwriters have to use their judgement to price such risks.
“It’s very subjective—and not only in terms of the disgrace element but also the death section. A Formula One racing driver, for instance, may be a good disgrace risk; but they’re in a high-risk occupation and that has to be factored in.”
Daniel Woods, Assistant Vice President at broker Marsh, Personal Accident, Contingency and Entertainment practice, says the policy is popular.
“We’ve seen a renewed demand for the coverage as the costs involved in these campaigns increase,” he says. “It’s a specialist cover and as such the market leaders are Hiscox and Beazley, with London viewed as the centre for the underwriting of such risks.”
Woods says the coverage will reimburse firms for costs of producing advertising. “Where firms are in need of advice is in explaining what is and what isn’t covered so they’re fully aware of what will trigger the policy and the level of indemnity it offers.”
Last updated on 21 Nov 2008
