Saints, sinners and 'disgrace' insurance

Can you guarantee that your celebrity
remains a Saint till the brand endorsement
deal comes to an end?

In "Celebs Behaving Badly? Brands Turn to Disgrace Insurance", posted here last month on Brandchannel, Barry Silverstein reviewed the nightmare scenario faced by a number of businesses that pay large sums for famous people to endorse their goods and services -- the damage done to the brand when the celebrity's fame is for all the wrong reasons.  Silverstein cites the examples of errant golfer Tiger Woods and English soccer star Wayne Rooney and writes about the concept of 'disgrace' insurance:

"... No surprise, brands want their backs covered when their ambassadors don't keep theirs covered. 

"There has been an uptake in interest in this type of insurance," says Mark Symons, an underwriter with Beazley, the Lloyd of London's insurance group, to The Independent. "We have probably seen an increase of about 30% in the last couple of years. Either you lose the money [invested in a celebrity endorsement] or you get a policy that will pay the cost of you restarting a campaign."

Brand marketers taking out such policies generally pay between half and one percent of the sum insured, according to a spokesperson for Lloyds. The premium could be lower for someone who "seems unlikely to cause a scandal." ...

Some branding experts think the damage to the brand is questionable, however. Stephen Cheliotis, CEO of Britain's Centre for Brand Analysis, also tells The Independent, "It's difficult to quantify how much damage a scandal has caused. It would require a robust tracking method of the brand performance before and after the scandal, and proof of a direct causal link." ...".

A premium of between half and one percent seems trivial in relation to the cost of celebrity sponsorship, and a business might consider it worth expecting the celebrity to foot the bill for it too, given that the sort of event insured against lies in the hands of the celebrity rather than the insured.  In the event that no brand-damaging scandal arises, the cost of the premiums might be reimbursed.

Do any readers of this blog have direct knowledge or experience of how the insurance works and what sort of criteria (i) trigger payment and (ii) fix its quantum?  It would be good to know.