Page 27 - Insurance Times March 2022

Television broadcasters also have impressive advertisement to the event. The staging of the event increases these types
revenues at stake which can be disturbed due to any of costs but the increase cannot be measured accurately.
interruption in the telecast of a live game. Instead, the amount of indirect cost attributable to the
event is roughly estimated.
The contingencies attached to these events are also quite
varied. Many natural or man-made contingencies can derail Generally speaking, irrecoverable costs and potential
such events. A rain washout or a terrorist threat or stadium/ earnings which cannot be recouped in case of an unexpected
pitch invasions by angry fans or spectators are realistic perils cancellation are insured against losses.
for the organizers. Pandemics which were earlier a remote
contingency are no longer so. Event cancellation insurers have had a tough year as a result
of the pandemic with festivals, conferences and sporting
Thus the financial exposures at stake here call for an events postponed or cancelled the world over. In these
insurance solution to mitigate losses for the sponsors in case cases, infectious disease cover was obviously a part of the
of unexpected contingencies causing a unexpected package though it may have been viewed as a remote
cancellation of the event. contingency. Broker Howden estimates COVID-19 event
cancellation losses have cost insurers approximately USD 5-
Event Insurance and Sports Insurance 6 billion.
Sports Insurance is a specialised branch of Event Insurance.
Event Insurance in itself provides a package cover for the Some recent major sporting events

sponsors of public or private events, such as concerts, To assess the financial magnitude and correspondingly the
festivals, conferences, trade shows and sporting events insurance implications of major sporting events, the
against unexpected cancellations and a variety of other expenses and insurance obtained in respect of the 2020
perils which can jeopardise the event. Tokyo Olympics as well as the 2020 Wimbledon Tournament
have been analysed on the basis of the information available
Sporting events more specifically include a gamut of sports in the public domain.
such as football, basketball, golf and cycling to horse riding,
gymnastics and more. Depending upon the financial The 2020 Tokyo Olympics & its related
exposures of the associated entities - public liability,
equipment cover and cancellation cover can be obtained in costs
tailor-made sports insurance solutions geared to specific The 2020 Tokyo Games, originally scheduled for the summer
needs. of 2020 were postponed by a year due to public health
concerns occasioned by the COVID-19 pandemic. They were
Events costs depend on the scale and type of the event. For held from 23 Jul 2021 - 8 Aug 2021 and it was one of the
example, the 2018 FIFA World Cup held in Russia cost an grandest sporting events in recent memory. It was a multi-
estimated USD14.2 billion. Some estimates indicate that the sport event which though devoid of spectators in the stands,
2022 FIFA World Cup is going to cost Qatar approximately
USD 220 billion.

Event costs will include direct and indirect costs. Direct costs
are those costs that are easy to identify and measure as
belonging to the event. The cost of trophies and medals or
the prize money is a typical example. Another important
component is cost for the venue. Venue costs also include
hidden costs such as security, supervision, heating and
lighting. Some of the other heads of expenses include travel,
accommodation and salaries for officials and employees,
medical expenses, promotional charges, transport and
insurance to name just a few important direct charges.

Indirect costs are costs that cannot be directly attributed

The Insurance Times, March 2022 27