In the “weird news” category and a clear sign of the end of times, insurance giant AIG introduced a new type of insurance on Thursday — Celebrity Product RecallResponse®. This new insurance product is “designed to help customers respond to risks from a celebrity endorser’s public fall from grace, scandal, or unexpected death.”

A good old-fashioned life insurance policy on a key figure in a business (or brand) is apparently not enough any more. Today you need to have insurance that the face of your product is not going to get a DWI, go into rehab or be arrested for domestic abuse.

You don’t have to be a financial genius or an astute social commentator to ask the question, if it’s “ok” to offer an extremely specialized product like Celebrity Product RecallResponse, just where do you draw the line on what should be insured? Are there no limits? Is it really in the best interest of society as a whole to have insurance for everything? Or is that just in the best interests of insurance companies?

Moreover, a practical person might suggest that instead of giving away shareholder’s money to an insurance company, a better solution to the problem of celebrity malfeasance might be thoughtful consideration of the character of your celebrity endorser before you pay him/her millions of dollars to represent your product.

Not The Onion: AIG Introduces Celebrity Endorsement Insurance

More on AIG’s Celebrity Product RecallResponse

The new insurance product is offered through AIG’s Lexington Insurance Company. Celebrity Product RecallResponse covers some costs incurred by firms to recall products bearing a celebrity endorser’s name and image.

A statement from AIG notes that the insurance is triggered by significant news media coverage of an endorser’s actual or alleged criminal act or conduct that results in public contempt for the individual and a major adverse impact on a firm’s product.

The new insurance product can be purchased as a standalone policy with limits up to $5 million, or by endorsement with limits up to $1 million, so the coverage can provide protection for companies of all sizes.

Statement

“Celebrity Product RecallResponse was developed expressly to address exposures companies take on when they associate with well-known individuals to promote their brands,” explained Jeremy Johnson, President and CEO of Lexington Insurance Company. “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.”