Reputations are fragile, to say the least. Pervasive videos and social media, supercharged by #MeToo, can result in high-profile disasters (think Kevin Spacey, Roseanne and Lori Laughlin) leading companies to look for new ways to mitigate the risks of key players’ reputational collapse. In Hollywood (California), studios hire risk managers, dig deep into stars’ backgrounds in search of red flags, and add “morals clauses” to contracts. They’re also investigating disgrace insurance.
Like other new types of insurance (terrorism, cyberattack, etc.), disgrace insurance addresses what we currently fear most, the persistent, growing dread that a career-ruining fall from grace is always just a click away.
Underwriters collect and analyze more than 400 biographical data points on each person to predict the risk of a future controversial event. The insurance offer companies financial protection for celebrity public scandals, everything from drunk driving arrests to racist tweets or a crime as unpredictable as a college admissions scandal, up to $10 million.
It’s worth to note that the insurance does not cover victims of a disgraced figure’s misconduct. Instead, the money remains in the hands of whoever the celebrity is working for. What interesting times.