2012 Olympics insurance risk highlighted

Posted on June 12^th 2012

From employer and public liability insurance to cancellation insurance, the money invested into the games and the potential fallout from a mass insurance claim could be devastating for Britain.

This might not seem a great concern, but the cancellation risk partner of the London 2012 Olympics has highlighted the damaging cost to insurers should The Games have to be cancelled this summer. Although most policies don't cover cancellation or disruption caused by public transport strikes or delays, many policies would have to pay out should extreme weather or acts of terrorism halt or cancel The Games.

Reinsurance specialist Munich Re explained: "should problems occur in the course of the event that lead to postponements, cancellation of certain events, or even to the Games being called off, the organisers would face large claims for damages that they would almost certainly be unable to bear alone."

The limits of pubic liability insurance would, of course, be tested in the event of a devastating terrorism attack which could lead to injury and, in extreme cases, death on a major scale. In addition to this, TV companies and sponsors have committed vast amounts of time and resource in the lead-up to the Olympics 2012 and they would want compensation should the games not go ahead.

Insuring the world's largest sporting events doesn't come cheap. The cost to insurance - such as liability - would be in the region of $5 billion in the event of a complete cancellation of the Olympic Games. This is a cost that could potentially devastate the UK's already struggling economy.

Related links

Munich Re's article on the potential risks surrounding the 2012 Olympic Games

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