'Disgrace' insurance on the rise
Multinational companies are taking out "disgrace" insurance to protect their reputations as sponsors after a series of sport stars scandalized their professions, The Independent reported on Sunday.
High-profile stars like Tiger Woods and British soccer sensation Wayne Rooney both were tied into lucrative contracts with global companies when news emerged that they cheated on their wives.
"We have probably seen an increase of about 30 percent (in this type of insurance) in the last couple of years. Either you lose the money (spent on the campaign), or you get a policy that will pay the cost of you restarting a campaign," said Mark Symons, an underwriter at insurance provider Beazley.
Woods reportedly lost an estimated $32 million in sponsorship money after he admitted cheating on his wife, with AT&T dropping its sponsorship completely and at least one other distancing itself from him, while Coca-Cola, which pays Rooney $967,000 a year for endorsements, plans to remove him from its U.S. campaign next year.
A spokesman for British banking giant Lloyds said the cost of the policy depends on the worth of the deal and the image of the celebrity. "If someone is squeaky clean and seems unlikely to cause a scandal, such as Roger Federer, then the premium would be quite low," he said.