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Bespoke Risk Solutions asks why companies are not being advised to consider specialist insurance..

In light of the recent football income tax scandal, the UK’s sports community is once again in the media spotlight for the wrong reasons. Football is big business in the UK and Europe, and according to Deloittes* the combined revenues of the ‘big five’ European leagues was €12 billion in 2014/15. In addition, four of the ‘big five’ leagues recorded revenue growth. A huge part of club revenue is the income that it receives from corporate sponsors. However, open the newspaper and it’s not just football that is making the headlines. Other sports have received negative media coverage recently including motor racing and cycling, plus there is an ongoing review of the use of banned products in athletics.

Recently the BBC**, reported that HMRC had arrested “several men working within the professional football industry for a suspected income tax and national insurance fraud”. “180 HMRC officers have been deployed across the UK and France,” the statement added. “Investigators have searched a number of premises in the north east and south east of England and arrested the men and also seized business records, financial records, computers and mobile phones.”

In January this year, a Parliamentary Committee revealed that 43 players, 12 clubs and 8 agents were the subject of “open inquiries” by HMRC.

It therefore goes without saying that, when large corporations like Betway, Emirates, AIA and Yokohama Rubber Company pay millions of pounds for either sponsorship or celebrity endorsements, they need to ensure that the clubs and people they are investing in have closets that are skeleton free. When it comes to sports people, literally millions of pounds are tied up in endorsements – so when the proverbial ‘hits the fan’ then sponsors stand to lose big time. The formula is not rocket science: Bad PR for the club = bad PR for the brand = less investment from sponsors.

This means that bad publicity for any club or organisation could have a negative impact on its brand equity. Whether trouble arises from players, managers or key staff, if they are publically ‘disgraced’ then the share price could tumble.

Companies and charities in recent years have all seen the effects that a disgraced celebrity has had on their income (it is an ongoing problem), and to recover and rebuild brand awareness or replace income losses could take years.

A study by the University of California suggested that the total economic damage of the Tiger Woods affair to all involved parties could amount to as much as $12 billion.

Peter Collins (pictured), Director of Bespoke Risk Solutions warned, “With the potential for bad news to spread at lightning speed via the Internet and social media, the risk to sponsors and advertisers is awesome. A Death and Disgrace indemnity insurance policy can provide cover for companies to recover wasted expenditure on advertisement production and airtime costs in the event that a contracted celebrity or club falls from grace.”

This might happen if an organisation has financed a major ad campaign and before it is completed, the celebrity is named and shamed publicly. Worst-case scenario (without indemnity insurance) would mean that the costs that the organisation has incurred or contracted to pay are completely lost and therefore irretrievable.

Andrew Sinclair (pictured) of PIB Insurance stated, “We are amazed that companies arrange insurance to protect their assets and liabilities, but this is one area, which in most cases could cause substantial losses, they have not considered. It could be suggested that the companies’ Directors have not ensured that the assets and liabilities are adequately insured.”

Nick Horner of Horner Blakey Insurance also commented, “We are surprised that a large number of clients are unaware or simply have not looked at Death and Disgrace indemnity. There are huge risks involved, and without this type of policy, the financial consequences could be substantial.”

Peter Collins added, “Death and Disgrace indemnity insurance policies will normally pay out in the case of the death of the celebrity or if the celebrity is convicted of committing a criminal act or any offence against public taste or decency. In addition, there could be cover if the celebrity degrades or brings another person into disrepute or provokes insult or shock to the community and this reflects unfavourably upon the campaign or brand. If your broker has not advised you about this insurance, perhaps you need to change your advisers.”

For more information contact Bespoke Risk Solutions on
+44(0)1702 200 222

Bespoke Risk Solutions Limited are an Appointed Representative of Leisureworld (GB) Ltd who are authorised and regulated by the Financial Conduct Authority (Financial Services Register No. 749920) You can check these details by visiting

Bespoke Risk Solutions Ltd are registered in England and Wales No. 07292153. Registered office: Victoria House, 50 Alexandra Street, Southend-On-Sea, England, SS1 1BN Leisureworld (GB) Ltd are registered in England & Wales No. 02663024. Registered office: 1422/24 London Road, Leigh On Sea, Essex, SS9 2UL.