Cancellation insurance and the Olympic Games
By Emily Hutto
The Olympic Games are upon us. That means we can assume the majority of our families, friends and coworkers will be checked out of normal life until mid-August, and tuned into the most grandiose display of athleticism the world has seen. This year, more people will see it than ever before.
If you’re fascinated with international media like I am, you might be interested to know that Olympic.org predicts the 2012 London Summer Games will surpass the record 61,700 hours of media coverage that the 2008 Beijing Games received. You might also like to know that BBC offers HD Olympic television, and that the London Games are the first in Olympic history that will be broadcast live in 3D. With more people than ever watching the games, there’s a lot at stake for its organizers.
What began as a sporting festival in honor of ancient mythological creatures has not only become the globe’s greatest athletic spectacle, but a microcosm of culture, with a set of economics all its own.
A report published by reportlinker.com in April revealed that travel and tourism from the 2000 Sydney Olympics boosted the country’s gross domestic product (GDP) by 18.3 percent. The 2004 Athens Games boosted Greece’s GDP by 12 percent, and the 2008 Beijing Olympics boosted China’s GDP by 6.4 percent. The decrease each year, says the report, represents the decline in global economy leading to the recession.
Beyond managing the tourism dollars that the games can bring in, businesses that are staging events or marketing campaigns in the run up to or during the games also have a lot of insurance considerations to keep in mind, says a Risk Adviser report from Marsh, the insurance broker handling risk placement for the Olympic Committee. The report says that businesses should consider purchasing cancellation insurance, among many other products, to ensure their success during the Olympics.
An article on PropertyCasualty360.com quotes Robert Barron, the assistant vice president at London-based private insurance broker Lockton, who explains why cancellation insurance is so important. “For event organizers, says Barron, cancellation insurance is not just about to providing insurance for the loss of the venue, but to also to assist in securing an alternative location for the show to go on.”
Barron holds that cancellation is a viable product because it not only insures the many stakeholders involved in planning a mammoth event like the Olympic Games, but also because more hands on deck creates success. “Everyone wants a successful event because that is how event organizers make their money, not by having an event canceled and getting your money back with insurance,” he says.
The article also quotes Barron’s stance that large-risk events like the Olympics should be handled in the same manner that small-risk events should. It’s an argument that makes me consider the significance of cancellation insurance.
What’s your stance on cancellation insurance? Should we consider it to be an every-day insurance product, or reserve it for Herculean spectacles?