2006 Olympics Pose Unique Risks for Insurers
February 6th, 2006 by Megan Mahan
While most of the world prepares to enjoy this year’s winter games, the 2006 Olympics have posed interesting risks for insurers and risk management teams responsible for insuring the events.
Courtesy of the Insurance News Network, AM Best reported today that as of last year, local organizers of the 2006 Turin (more commonly known as Torino) games have invested around $200 million to insure the events from delays and cancellations.
The Turin Organizing Committee for the Olympic Games (TOROC) is responsible for setting up make-shift structures and running sports and media facilities for more than 3,000 athletes and 10,000 journalists, reports AM Best. TOROC is also responsible for providing informational support systems and the technology infrastructure for the 2006 winter games–all of which needs appropriate coverage.
According the the INN, the logistical concerns for this year’s Olympic games are similar to those of the winter games in Salt Lake City, Utah, largely because the host city isn’t near the mountains.
Peter Luck, an underwriting manager and cancellation specialist for the games, says that road transportation from Torino to the actual event sites could pose challenges for athletes, members of the media and event-goers–a landslide that destroys or obstructs a main roadway could trigger coverage if the games are indefinitely postponed.
Cancellation policies are a must-have for large events like the Olympics, which cover repayment of TV rights if the games are disrrupted, cancelled, or if athletes or officals are a no-show.
And while the threat of terrorism remains a concern for Olympic insurers and investors, TOROC has not yet opted to purchase terrorism insurance.
Nonetheless, officials are conscious of an increased risk of terrorism and the International Olympic Committee has purchased event cancellation coverage, which protects against catastrophes that could cause a total cancellation of the winter games.
Insurers and risk management firms alike have had their hands full planning for this year’s winter games. And while we all appreciate their hard work and considerate planning, we undoubtedly hope their services won’t be needed and the games continue without a hitch.
