According to the Hollywood Reporter, Lexington Insurance Co. (a unit of AIG) has developed a new type of insurance–one that will protect companies when their celebrity endorser makes headlines (in a negative way). Previously, brands would either cancel their contracts with the celebrity, pull advertisements, or even remove the endorsed product from the market when the star supporting the product received negative press. Yet, there was no way to recoup the funds spent on these advertising campaigns. With this new insurance, companies will receive coverage to recover the costs of removing products from the market (i.e. transport and disposal), as well as costs incurred withdrawing advertisements displaying the “disgraced” celebrity. However, not all products can be covered under the system–only endorsements. This means films or televisions shows with actors and actresses behaving poorly will receive no protection. Nevertheless, this is a huge advantage to companies in an increasingly digital age–where a celebrity’s mishap can become headline news instantaneously.
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