Tiger Woods crisis sparks new ‘reputation risk insurance’ for sponsors

Where there’s a crisis, there’s a buck to be made.

In the wake of the Tiger Woods fiasco, DeWitt Stern, a century-old risk management firm in New York, will be offering “reputation risk insurance” to advertisers and other companies starting in the new year.

Sponsors paid Woods tens of millions of dollars a year to endorse their products.

“The Tiger Woods scandal shows how quickly reputations can become tarnished in today’s fast-paced media environment. All the planning in the world cannot protect a brand manager against the unforeseen,” LeConte Moore of DeWitt Stern said in a news release.

The new type of insurance “will compensate policy holders for both the cost of crisis remediation and actual loss of revenue following public relations crises,” the news release said.

What do you think of this idea?

If you’re a company exec, would you consider buying it?

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16 comments Add your comment

George

December 16th, 2009
7:23 am

It’s not the sponsors fault for endorsers inequities. Contracts should have a clause in them that addresses such behavior. As an advertising executive, I would not purchase such a policy.

DAVID

December 16th, 2009
8:02 am

INSIDERs……….sports writers………………knew TIGER was a fraud……from the getGo/…TIGER was a character built upon lies……from the MEDIA

DAVID

December 16th, 2009
8:03 am

JUST like Barack Obama was a Media Creation….built upon lies.

Jon

December 16th, 2009
8:04 am

George I totally agree. What one must remember is that these are people, humans, not machines. A company cant be held responsible for what one does in his or her persoal lives nor should they. What one should be concerned with is that the individual is one of the best in the world and they use our product. If sponsors wanted role models they would sponsor teachers and GOOD parents. The only problem is that 78 million people dont watch a teachers and parents.

Actually theres an idea; a goup of kids and the volunteer coach out on the field; they gather in the middle and the coach delivers some kind of good job, feel good speach to the kids; the pitcher hands him the ball the camera focuses on it for a second and there it is “swoosh” followed by we donate X$ a year to communities all over the world so that the real role models can shine as well!

Kelly

December 16th, 2009
8:17 am

This is to David. The United States was built on lies and by the backs of others. So what’s your point?

Roger

December 16th, 2009
8:32 am

I wonder if the insurance carrier that will provide the coverage is AIG!

Chief Wiggum

December 16th, 2009
8:32 am

I agree with George. Carefully tailoring the contact with your spokesperson is the wisest measure, and any representation contract like that has risks anyway. Those should be factored into the compensation and contract terms.

Insurance works to spread risk over many entities. It may be appealing to some firms, especially those who do not have the leverage to enter into a really good contract that protects their interests. Many large firms prefer to self-insure on many items, and I expect the same would happen here.

blkshepherd

December 16th, 2009
8:33 am

You tell em Kelly. This David person is one of those Blame Obama for everything that was a MESS before he became president. Your absolutely right. The USA was built on lies and by the backs of others. Not to mention how Much Land we stole from the True Native Americans(Indians) then killed them. Not to mention the slave trade. So what exactly is your point David?

barneyb

December 16th, 2009
8:39 am

Any corporation that enters into a contractual agreeement with anyone should have a morals clause written in. If they don’t, they’re just plain stupid.

Needabailout, too!

December 16th, 2009
8:56 am

When all this blows over, which it will, I’m looking forward to watching Tiger on the Tour again. BTW, refreshing to have all these Dems on the board for a change. Me, too!

connie

December 16th, 2009
8:57 am

But he is a perfect candidate for football. NFL is the perfect place for the unethical and illegal.

Fair and Balanced

December 16th, 2009
9:32 am

No connie…that would be the GOP.

Fair and Balanced

December 16th, 2009
9:33 am

So apparently David thinks Tiger didn’t actually go out on the golf course and win, its a mirage…he really ISNT the best golfer in the world….something tells me David listens to Glenn Beck a lot.

adam

December 16th, 2009
7:59 pm

Technically these companies aren’t really buying in on Tiger’s personal life in the first place, only his professional life. They would only really be entitled to benefits based on his time away from the game, at least if i was the insurer. His character in the long run will have very little effect, there is just temporary backlash over the fact that the media had built up such a clean image of him. Look at Jordan he’s still endorsing products. The fact is it would be to hard to calculate losses as a result of the publics changed veiw of his character should he continue to win tournaments. Thus it would be really hard to get an insurance company to pay out based on the policy because they can claim that it requires X amount of time to prove damages that trigger the policy.

#1 Foxy Lady

December 17th, 2009
9:06 am

As long as they are not insuring against getting some SWEET TAIL!!!

charlred19

December 19th, 2009
12:53 am

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