The rise of scandal insurance in Hollywood.
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Other disgrace events, as Slattery called them, were harder to categorize.
RapperLil Xanhad pulled a gun on someone at a 7-Eleven over a dispute about Tupac.
Also, Lil Xan had used the N-word.
Pardon my ignorance, said Mira Carbonara, Spotteds VP of commercialization.
He is not, but the ethnicity of the victim was unknown.
They agreed to log it as a hidden risk for future racism.
Carbonara decided to split the difference; it was both a risk and an asset.
There was also the fact that his penis and etc.
are in the photos.
Would we want to include the tag of leaked nude photos?
Those reputations, meanwhile, are increasingly fragile.
Theyve also been asking around about insurance.
If SpottedRisks product takes off, it will join a small but growing industry of disgrace insurers.
In the case of Spacey, it was at least $10 million.
By November 8, the financiers had decided to shoot the 87-year-old Christopher Plummer in Spaceys role.
This wasnt the first time the loss of an actor had resulted in cost overruns and delays.
Since Spacey wasnt disabled or dead, but disgraced, the production picked up every penny of the tab.
Subjective wording leads to disputes.
Insurance has to involve no litigation, says Bill Hubbard, CEO of the entertainment insurer HCC Specialty Group.
You know the Supreme Court justice who said, I know pornography when I see it?
You cant settle claims that way.
A UC Davis study put the brands shareholder losses somewhere between $5 billion and $12 billion.
But it wasnt Woods who made disgrace insurance look viable; it was reality television.
A few months before the golfers car crash came what one underwriter refers to only as that Viacom loss.
Thats when the company started buying disgrace insurance.
He wouldnt offer specifics, but others have given two examples:P.I.
Its something we dont advertise, says Jellen of disgrace insurance.
You dont have to sell people on disgrace.
That seems true of unscripted shows, a thriving corner of the disgrace business.
All of them know more than their clients.
But what does an underwriter know about Mel Gibsons history that Mel Gibsons agent doesnt?
Theres all this demand, says HCCs Hubbard, but there hasnt been a viable product.
SpottedRisk thinks it has found the solution, which happens to be a popular one among start-ups: data.
Spotted knows aboutMel Gibsons history, and it claims to know exactly how risky that makes him.
The highest predictor of future disgrace is occurrences of past disgrace, said Nicholas Hanes, Spotteds first underwriter.
Spotteds deep analytics, he said, are the rain data; theyre the flood maps.
What has changed is the severity and randomness of it all.
Something like thecollege-admissions scandal: That is a snowstorm in California in June.
Spotted aims to make disgrace at least as predictable as the weather.
And just like the Richter scale or tornado categories, the Outcry Index sets the payments.
Thats within the normal range for catastrophic insurance.
It wasnt the most exciting thing, she said.
During sales calls, she developed a nervous tic: constantly refreshing Perez Hiltons website for celebrity gossip.
Before long, Comenos found a way to turn her compulsion into a start-up of her own.
Lampert was fascinated by the sports side of celebrity, particularly the data side of the sports side.
What Billy Beane did for baseball, Lampert wanted to do for fame Moneyballit.
We became interested in how we could leverage or utilize those endorsements.
That was two pivots ago, as Hutchinson put it.
The company signed up Nike, Neiman Marcus, and H&M.
But it turned out that brands didnt really want to be told which stars best suited their image.
The brand would ask us to look at a list of five or ten people, said Comenos.
The recipients of those reports werent grateful; they were pissed off.
Eventually, Comenos turned for advice to an ad veteran, Sir Martin Sorrell.
(He has publicly denied it.)
Comenos decided to pivot again.
Hanes is the currentco-president of the North American Contingency Association.
She got a laugh when she said, Males tend to be a little riskier overall, not surprisingly.
According to Spotted, all kinds of things make one celebrity riskier than another.
But behaviors are far more important than demographics.
(Comenos calls him and Hutchinson the Doctors of Disgrace.)
Often it comes down to finding not a skeleton in a closet but a trail of half-buried bones.
Mitigating the risks are seemingly fuzzier factors such as likability and resilience.
Other times, its beyond their control.
Spacey may have been doubly doomed because he has played so many bad characters.
Individuals who play villainous roles are not forgiven at as high a rate, said Comenos.
She didnt mention Spaceys sexuality.
Spotted aims to quantify our standards, which are never as immutable as we think they are.
Disgrace has always been subjective; thats why past policies have been constructed so vaguely.
And that is why the Outcry Index is arguably more important than the risk score.
Data is collected for 30 days, though the claim is triggered after a week.
was a 2; Roseanne Barr and Matt Lauer were 3s, Spacey a 4.
You learn things about people from data like this.
Certain celebrities are Teflon.
Chris Brown, despite 40 prior disgrace events, remains insurable at least for Spotted.
The data also found that social-media outrage doesnt always reflect broader attitudes.
Almost every single event looked like it was a world-ending event.
The internet just does not react to things in the way that humans do.
Barr is the rare exception, having spawned equivalent outrage on Twitter and IRL.
The survey results have left Spotteds Doctors of Disgrace with a view of the public as fairly forgiving.
Hutchinson presentsLiam Neesons controversial anecdoteabout wanting to kill a black bastard as evidence.
The severity wasnt nearly as high as youd predict, he said.
It turns out that the vox populi is capable of nuance.
The only celebrity anyone at Spotted declared essentially uninsurable was Kelly.
Some people are basically human triggers.
There will be an ad inThe Hollywood Reporter,reading, HAVE YOU BEEN DISGRACED?
Before getting its underwriting license, Spotted had spent a few months looking to partner with existing insurers.
But he has no immediate plans and sees little urgency in competing over a product with no track record.
Im not sure going second or third isnt the best thing to do in product development, he said.
Its unlikely that someone is going to get it right the first time.
Other experts were not convinced SpottedRisk could attract enough regular clients to create a stable risk pool.
Another lingering problem is that $10 million still wouldnt cover even a relatively modest indie film.
Even to secure $10 million, she has had to compromise on several features.
Spotted plans to sell its insurance through traditional Hollywood brokers, including Gallagher Entertainment.
He didnt think the lower tiers would cover enough of the losses.
We need more limit, but I think its a start.
Kingman is reasonably confident that, with hard data and Lloyds backing, the policies will work.
What hes not so sure about is that theyll sell.
Comenos isnt the jot down to wait to find out.
Like disgrace insurance, but for companies instead of people.
It makes sense; one recent report found that reputational damage is the No.
1 risk that companies fear.
