American International Group (AIG) has launched a new insurance product Celebrity Product RecallResponse, which allows customers respond to risks from a celebrity endorser's public fall from grace, scandal, or unexpected death.


The company will provide the new insurance product through its Lexington Insurance, a domestic excess and surplus lines carrier in the US.

Lexington Insurance president and CEO Jeremy Johnson 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."

The new product will cover certain costs incurred by companies to recall products bearing a celebrity endorser’s name and image.

It is being acted by significant news media coverage of an endorser’s actual or alleged criminal act or other distasteful conduct that results in public contempt for the individual and a significant adverse impact on a firm’s product.

The new product is available with standalone policy limits up to $5m, or by endorsement with limits up to $1m, and is suitable for companies of different sizes, including start-ups, small and mid-sized businesses that are engaging a celebrity endorser.

According to the company, the coverage comprises costs associated with removing products and packaging from the marketplace, including their transportation, disposal, or destruction.

In addition, the coverage reimburses companies to remove marketing and advertising materials bearing the celebrity’s image.

Image: AIG headquarters on 175 Water Street New York City. Photo: courtesy of AIG.