AIG launches celebrity scandal product

American International Group’s (AIG) commercial insurance division has introduced a new product designed to help customers respond to risks from a celebrity endorser's public fall from grace, scandal, or unexpected death.

Provided through AIG’s Lexington Insurance Company, Celebrity Product RecallResponse, covers certain costs incurred by companies to recall products bearing a celebrity endorser’s name and image.

AIG said the insurance is triggered by significant news media coverage of an endorser’s actual or alleged criminal act or other distasteful conduct that results in (or is likely to result in) public contempt for the individual and a significant adverse impact on a company’s product.

Coverage includes costs associated with removing products and packaging from the marketplace, including their transportation, disposal, or destruction. The coverage also reimburses companies for the removal of marketing and advertising materials bearing the celebrity's image.

Jeremy Johnson, president and chief executive officer of Lexington Insurance Company, said:”Celebrity Product RecallResponse was developed expressly to address exposures companies take on when they associate with well-known individuals to promote their brands. 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.”