What Types of Event Risks Do Insurers Factor Into Coverage?

5 Unique Risks of Major Global Events

Take a look at some factors that insurers consider when underwriting events on the world stage.

Participants and spectators see global sporting events through lenses of competition and entertainment. Insurers have an additional perspective.

“We think of the products that may have been purchased to protect the event,” says Rebecca Mitchell, a contingency underwriter for ArgoGlobal in London.

Hosting a major global function involves substantial amounts of money and takes years of planning. And anyone with a financial interest – from the organizing committee to merchandise vendors at the venue – will be buying insurance.

Mitchell says providers must consider these types of event risks when underwriting things that take place on the world stage.

  1. 1. Adverse weather

    Steady rain producing high floodwaters

    When poor weather strikes, maintenance personnel at professional stadiums are prepared to protect the pitch so that it stays in good condition. But if the weather changes dramatically from the forecast, causing damage to the surrounding infrastructure, will matches still be able to take place?

  2. 2. Terrorism


    Large sporting events are potential targets for terrorist organizations. Just consider the Stade de France attack in November 2015, when three bombers set off explosive vests during a football match.

    Insurers consider the security and management plans of an event, which provide details as to how various scenarios will be handled. They must also be aware of the geopolitical climate of participating countries – there could be problems with hosting were some teams to boycott the event.

  3. 3. Local infrastructure


    During the 2014 FIFA World Cup in Brazil, stadium construction and timing were an issue. That same year, the Sochi Winter Olympics had similar problems with athletes’ accommodations. Insurers have to consider whether stadiums, airports, roads and other local infrastructure can handle massive gatherings of people.

  4. 4. Communicable disease


    From early 2015 to late 2016, a Zika virus outbreak that originated in Brazil spread throughout North and South America, the Pacific Islands and parts of Southeast Asia. As with any event that draws people from all over the world, disease can potentially spread quickly in a short period of time. At the 2018 Winter Olympics, for example, norovirus infected around 200 people.

  5. 5. Natural disasters


    While France is not susceptible to seismic activity, the 2011 Rugby World Cup in Christchurch, New Zealand, wasn’t so lucky. Seven matches had to be moved to other venues after an earthquake measuring 6.3 on the Richter scale.

As a leading global specialty underwriter, Argo Group offers a wide breadth of insurance products across five business areas: casualty, marine and energy, professional liability, property, and specialty. Learn more at argolimited.com/international.

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