Insurers play ball with large sporting events

British sports stars were certainly more conspicuous in the final stages of the 2024 Euros than at this year’s Wimbledon tournament, but major sporting events rarely lack involvement from UK insurers.

Both Lloyd’s and the company market feature heavily to cover a plethora of risks – from liability and event cancellation or contingency, to property damage, cyber and terrorism.

An event like the Olympics also involves travel insurance for spectators and personal accident (PA) insurance for competitors.

There can be overlap between individual and commercial risks. For example, Tokio Marine HCC complements its event cancellation offering with a dedicated team to cover death, accident and injury to competitors.

But, industry-wide, the commercial side of sporting event insurance usually involves little in the way of off-the-shelf policies or immediate fixes.

Edel Ryan, head of strategic business development UK and Ireland for sports, entertainment and media at Marsh, told Insurance Times: “For a major sporting event, a contingency and liability programme will almost certainly be bespoke and we will work closely with the client – sometimes for many years in advance – to apply the learnings and risk management that go into addressing the high profile risks highlighted.”

The loss adjusting community also fine tunes its approach well ahead of an event’s timetable to enable it to act efficiently and with agility.

James Norman, international business development director at Sedgwick, explained: “We already have adjusters licensed to work wherever they’re needed across the many Olympic venues in Paris.

“Our digital global intake system is set up to manage large influxes of claims, complete with automatic fraud screening and validation tools.

“Technology – including remote drone inspections, innovative video and remote loss adjusting tools – is playing a vital part.”

Sums insured can be spectacular on specific sporting events too, adding to their unique risk profile.

For example, Allianz – the official insurance partner to the Olympics and Paralympics – reported in June 2024 that the Paris games, which start on 26 July 2024, is expected to cost €4.4bn (£3.7bn) to run. Even a Premier League football match can require £500m public liability cover.

So, different insurers sometimes share a single cover. Around £100m of public liability cover could be split between five to eight of them.

Equally, some risks can involve more than one broker, with some brokers even doing their own underwriting.

For example, since 2017, Miller has had a delegated binding authority from a panel of six Lloyd’s underwriters to deal with up to £25m of contingency cover.

The major covers

The ever-evolving small print for public liability and contingency insurances – the two major covers for large sporting events – makes broker involvement crucial when securing cover.

Bryan Banbury, chairman at Russell Scanlan, explained: “Abuse cover is an area where some insurers try to limit their exposure by quoting a lower limit under public liability, or putting it onto a claims-made basis with a retroactive date. This avoids any claims being made years after any alleged abuse.”

Terrorism has become widely excluded on public liability policies, but with contingency cover – despite being subject to a standard Lloyd’s exclusion – it can be covered by the company market. Weather-related contingency risks also throw up different stances.

Elizabeth Seeger, contingency underwriter at Hiscox, said: “Adverse weather cover is automatically included for indoor events, but for outdoor events, it would be assessed separately and would depend on everyone’s appetites.”

Other notable exclusions for both contingency and liability include cyber risks and communicable disease.

Although it can be possible to buy back some excluded covers, like cyber and terrorism, from insurers or obtain them via specialist markets, finding cover for Covid-19 is particularly hard.

Peter Shellard, a contingency underwriter in Miller’s sports and entertainment team, explained: “Since Covid-19 hit, communicable disease cover via buy back is not readily available – but a couple of companies offer some form of the cover.”

Munich Re’s epidemic and pandemic proposition is highlighted by Ryan as covering new forms of Covid, but not existing ones.

She continued: “It’s exciting and its parametric trigger promises a quick claims settlement. Overall, the client will always prioritise the order of its risks and we will look to provide solutions. But the action they take may come down to both budget and breadth of cover.”

Covid-19 is likely to remain a big issue in this line of business, but at least the cloud that the pandemic cast on sporting events as a whole has been lifted.

For example, Arch Insurance told Insurance Times that enquiries for event cancellation are now back to, if not surpassing, pre-pandemic levels and that the market shows no signs of slowing down.