Insurance giant American International Group (AIG)’s US$6.1 million (about SG$8.4 million) lawsuit against Kim Kardashian West’s former bodyguard is a “classic subrogation scenario” blown up by world media because of the reality TV star’s celebrity status, says an insurance professor.
The insurer is suing Kardashian West’s former bodyguard Pascal Duvier and his company Protect Security for “negligently, carelessly, and/or recklessly perform[ing] their protection, security, monitoring, inspection, and/or surveying of” Kardashian West when she was robbed at gunpoint of millions of dollars’ worth of cash and jewelry in a Paris apartment.
AIG paid Kardashian West’s hefty claim but is now seeking US$6.1 million back from Duvier and Protect Security, according to court documents filed last Wednesday in Delaware.
“This is a classic subrogation scenario. The issue here is that we’ve got a celebrity name attached to the case, which makes it bigger and more interesting to the public,” said Mike Angelina, executive director of the Maguire Academy of Insurance and Risk Management and professor at Saint Joseph’s University. “Kim Kardashian hired a security guard to protect her and according to AIG, this security guard breached his duty in terms of protecting her. The argument is that had Duvier and Protect Security done their jobs properly, Kim Kardashian wouldn’t have been robbed.”
According to a CNN report, AIG claims the defendants left Kardashian West alone in her room and failed to correct a number of security breaches in the Paris apartment. The alleged breaches include a missing or broken lock, a malfunctioning intercom and the lack of CCTV in the building. The insurer also says the private apartment’s concierge “did not have any security training and/or background”.
“AIG would not have filed this suit if they didn’t think it was appropriate,” commented Angelina. So, what happens next? Either the parties will fight this out in court - and potentially incur significant litigation costs - or they will reach a settlement before trial. They will typically carry out litigation risk analysis to see whether it’s worth going to trial, Angelina explained.
According to Angelina, a key lesson brokers can take away from this case is the importance of understanding the client’s end-customer. He told Insurance Business: “The security firm will have purchased a liability insurance policy to protect against claims of negligence, but the question really revolves around what other risks might be out there. A security firm is not just guarding an apartment, a school or a library. What happens if they fail? What unintended or unforeseen exposures does the security firm have if they fail at their job?”
Providing security is a risky business. The difficulty in protecting a star like Kardashian West is that celebrities can often be unpredictable in their actions, and insuring such an unpredictable risk is a tough task.