The Olympics are underway, putting the pressure on thousands of businesses and associations to ensure the events go off without a hitch – no small feat, considering this is one of the riskiest Games ever, says an expert.
“With this Olympics in particular, with the heightened risk and awareness of potential terror threats and there being some circumstantial or anecdotal evidence of there being less-than-pristine conditions in Rio, it would be wise for anyone with a financial stake in the event happening as scheduled to have insurance,” says Jared Zola, partner at Blank Rome’s policyholder-only insurance coverage practice.
“Certainly the potential risks appear to be higher, whether they actually happen - everyone is hopeful they won’t – it really is just where the world is, and in the present day, there actually does seem to be greater potential for risks at this Olympics.”
While event cancellation coverage is often overlooked or hedged by entertainment venues, the Olympics are of such a scale that it’s vital all stakeholders protect themselves, Zola adds.
“Any entity with a financial stake in the Olympics happening, and happening as scheduled should be taking out a broad form event cancellation policy,” he says. “The event is so big in terms of not just for the IOC but for the media, the television networks, the merchandise vendors, even the local hotels and restaurants – everyone is going to see a huge uptick in finances as a result of the event happening as scheduled.”
And, while extreme precautions have been taken to prevent terror, health or crime crises, Zola says an interesting insurance precedent could be set should such an event occur.
“An interesting question will be if something does happen in terms of the quality of the facilities, or the standards of the venues, whether there was any information known by the IoC that would affect whether they should move forward with the games,” he says.
“If, for example, one of the venues where an event takes place is shut down, and there ends up being damage or potential for bodily injury, or if people end up bringing claims against the IoC for negligence for bringing the games to a place that has such a low standard and conditions - whether or not they have any merit - there could be some interesting insurance questions that arise from this.”
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