Woods "Brand" Helps Push Broker's New Product

On Dec. 14, the company sent out a statement saying that it was introducing its product at the beginning of 2010, citing the Tiger Woods drama and how that can put a company's marketing campaign in bind.

"It was pure coincidence," explained Mr. Moore. He said when the scandal broke and Accenture pulled its advertising featuring Tiger Woods, the brokerage realized this was a prime opportunity to take advantage of the situation and announce plans to roll out its product.

However, the reaction to the release was unexpected, he admitted, with scores of press inquiries about the product, including the United Kingdom's BBC.

DeWitt said its insurance will "protect brands, corporate entities and advertisers against losses incurred from reputational crises," compensating policyholders "for both the cost of crisis remediation and actual loss of revenue following a public relations crisis."

With the "viral nature of media today" in a world of instant messaging, texting, YouTube and Twitter, where any news or rumor can spread quickly and damage a company's reputation, DeWitt felt clients were primed for this kind of coverage.

He said DeWitt is continuing to talk with Lloyd's to finalize underwriters for the program, with the goal of creating a $50 million facility. The program would also provide risk management solutions to deal with these issues.

Lori Shaw, sports and leisure practice leader for Aon Entertainment Group, part of Chicago-based insurance broker Aon, said that quite a few companies use celebrity endorsements in their advertising, noting that in the United States there are moral clauses in the contract allowing sponsors to break ties with the individual spokesperson should they do something criminal or against public policy.

However, there is usually insurance coverage in place in case of a celebrity spokesperson's death or disability, allowing the company to recoup costs and expenses for the campaign and launch a new one.

The trickiest part is creating a policy that will protect revenues or profits from the loss of a campaign, said Ms. Shaw. That means being able to show something quantifiable about the campaign and its effects on the company's business.

"Sometimes the [client] believes it's a better idea to bear that risk than to transfer that risk because of the perceived cost," Ms. Shaw noted.

Bill Harrison, managing director of Aon's crisis management practice, advised that the best strategy for any company, when a celebrity causes an embarrassing situation, is to cut ties early before there is reputational damage to the sponsors.

This appears to be the motivation behind Accenture's response to the Tiger Woods debacle. He said that Accenture–a consulting firm formerly known as Arthur Anderson–indicated its client base had not yet been damaged by the affiliation and it wanted to make sure there was no such impact going forward.

"It's not a huge insurable risk from a corporation's point of view because they can just get rid of the person," he said.

As for whether Mr. Woods has any coverage for the loss of his sponsors, none of the brokers were aware of any such policies in place. However, they did note that insurance coverage for harm done to a company because of the adverse behavior of a celebrity is popular in Europe.

Mr. Moore said he believes it will just be a matter of time before these types of coverages gain traction in the United States.