Insurance Worries For Winter Games
The Age
Tuesday October 16, 2001
The International Olympic Committee and the Salt Lake City Winter Olympic Games organisers have been left financially exposed because they have inadequate insurance cover in the event of a terrorist attack.
Salt Lake City has only $300million of insurance with Lloyd's of London for its $2.5billion event after its original $600million coverage was cut two years ago to save on premiums. The IOC has no insurance.
The revelations follow the legal jousting between insurance giant Axa and next year's World Cup soccer organisers. Axa has given soccer's ruling body, FIFA, one month's notice that it is withdrawing insurance coverage of the 32-nation event in Japan and South Korea because of the risks posed in the wake of the September11 attacks on the United States and the war against Afghanistan.
The Commonwealth Games, to be held in Manchester next July, finalised its insurance coverage, which includes cancellation clauses, with American firm Ace Insurance only a week before the terrorist attacks.
The Australian Commonwealth Games team will be insured, but chief executive Perry Crosswhite said he has been told by brokers ``it will cost a lot more". Australian Winter Olympic team members all have $10million of personal liability cover with AMP, which includes hijacking, kidnapping and terrorist acts.
IOC president Jacques Rogge has repeatedly claimed that the Winter Olympics, to be held in Utah from February8-24, would go ahead despite it being an obvious target for anti-US aggressors.
``We are committed to having the Games," said Rogge, claiming that the $400million security preparations for Salt Lake City needed only minor tweaking.
But Rogge, who has been given unprecedented emergency powers to cancel the Games without reference to the executive board, has admitted that it would be a logistical nightmare.
International broadcasters, including the US giant NBC and Australia's Channel Seven, have collectively paid $1440million to televise the Salt Lake City Games.
Australian IOC executive member Kevan Gosper said the IOC decided several years ago against taking out insurance coverage for any cancellation of the Games. ``The risk goes back to the host city, and the IOC (which keeps 60percent of the broadcast and worldwide sponsorship program) relies on the host city insurance," Gosper said.
``But the decision is quite clear - we will have the Games and unequivocally it will be in Salt Lake City."
But another IOC executive, German lawyer Thomas Bach, said: ``You can say if there is no Games, there is no TV money."
But Bach and Gosper both said that the Winter Olympics should go ahead even if the international crisis deepens.
``I think the more tension there is, the more the world needs the Games," Bach said. ``Sport is there to build bridges. It is important that the dialogue of the world is continuing. In this respect, the Games and the Olympic movement can play an important role."
FIFA president Sepp Blatter was furious that his sport, which had recognised and paid for risk insurance, had been left unprotected after Axa reneged on its deal.
FIFA had already paid more than half of its $33million premium for the insurance, which included cancellation coverage worth $1.7billion.
``The deal will have to be renegotiated because the World Cup cannot go ahead without insurance, which covers, for example, bank guarantees, marketing rights and also acts of terrorism," Blatter said.
``There is no question that this will stop the World Cup, which will definitely go ahead."
Local sports federations, such as Australian Swimming and Softball Australia, have sought indemnities from athletes travelling overseas to protect officials from any liability.
Meanwhile, the US terrorist attacks have resulted in the redeployment of senior FBI agents, who were prosecuting two former bid officials on 10 fraud charges in the wake of the Salt Lake City bribery scandal. It is unclear whether the trial will go ahead.
© 2001 The Age
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