Why firms need to plan ahead to limit damage by association, as the BBC may have found out with Jeremy Clarkson

 
Edel Ryan
SAFRICA-ENTERTAINMENT-RACING
Clarkson has since apologised, but those broadcasting Top Gear have probably felt knocked back (Source: Getty)

The career-ending and potentially life-threatening injuries suffered by celebrities taking part in The Jump recently has raised some questions around whether the continuation of the TV series is in good taste.

If the broadcaster were forced to cut short the production, lucrative advertising and sponsorship deals could be left exposed, not to mention committed production costs. If the show is commissioned for another series, a number of interested brands and sponsors may pull out to limit damage to their reputation by association.

Celebrity endorsements can do wonders for a brand but a highly publicised fall from grace can expose businesses to unwanted publicity and possibly result in lost revenue.

Recent examples of this include the decision the BBC made regarding Jeremy Clarkson. We have also seen Adidas terminate its contract with Adam Johnson, the former Sunderland footballer, following his ongoing trial in court for alleged sexual offences.

By using tailored disgrace insurance, broadcasters, advertisers and sponsors engaging with personalities can mitigate their financial exposure. These policies are designed to insure against the loss of revenue and expenses when an individual goes rogue or is involved in incidents judged to be in bad taste. The allegations surrounding Bill Cosby, for example, has led to almost every single network cancelling programmes featuring the comedian.

When it comes to TV advertising, this type of insurance is essential to protect sizeable investments over a very limited period. Celebrities are likely to have behavioural clauses within their contracts, not unlike codes of conduct within employment contracts. If the conduct of a celebrity breaches the clause, there may well be a personal liability claim for the policyholder to pursue. This may not be enough to protect a major brand from loss of production costs in addition to artist fees, airtime, and other associated consequential costs but will help cushion the blow.

Increasingly enquiries are coming from outside of the TV advertising industry as brands, studios, broadcasters and sponsors want to effectively capture their commercial risks that traditional insurance policies are simply not designed to.

Furthermore, with the rise of social media, insuring intangible assets from reputational damage has become a board room issue for almost every business. Social media platforms allow one misjudged comment to prompt a national, even international uproar; the ability of the general public to influence the behaviour of broadcasters, sponsors and brands cannot be ignored.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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