Ever Wondered Just Who Insures the Olympics?
With the Rio Olympics in full swing, we wanted to know just who insures the Olympics? Well, that’s a pretty complicated question.
With 308 events showcasing the talents of 11,551 athletes, over $9 Billion in infrastructure and transportation investments, and over 300 gold medals ranging in value from $10,000 to over $1 Million, there are a multitude of Health, Disability, and Property & Casualty risk and coverage concerns that are inherent to the Olympics.
When Medals are Meddled With
One area of concern is the coverage of potential loss of an Olympic medal, especially gold medals. These can range in value depending upon factors such as which sport they are awarded in or if they have some specific historical significance. For example, one of the four gold medals won by Jesse Owens in the 1936 Berlin Olympics was sold in 2013 for $1.47 Million. While this medal probably has its own coverage through a specialty lines arrangement, current medals are covered through a policy provided from Liberty Mutual through the USOC to cover all Bronze, Silver, and Gold medals won at the 2016 Summer Olympics.
Through this insurance policy with the U.S. Olympic Committee, Liberty Mutual Insurance will ensure 2016 U.S. Olympic and Paralympic athletes who are not financially responsible to replace their treasured prizes, just as the company is doing for members of Team USA who earned medals in Sochi. – Liberty Mutual Press Release
Covering the Risk of City Investments
By far, the greatest financial risk to the games is the potential property & casualty loss such a huge investment creates. It’s a common occurrence for sporting venues and their accompanying infrastructure change to become a major investment for city governments as well as their residents. If a catastrophe were to severely minimize the event’s ROI, it would be a massive economic burden to a community of any size.
Some estimates put the investment costs for the 2016 games at $9-$20 Billion. (For a breakdown of costs check out Forbes’s article “The 2016 Rio Summer Olympics: By the Numbers” and CNBC’s article “Rio 2016: Economists Question Wisdom of Hosting Olympics”)
While getting specific information on who is covering what costs is very hard to find due to gag orders and other contractual limitations, it’s clear that multiple insurers are offering multiple standard and specialty coverage lines.
Chicago and Boston, two cities who were in competition to obtain the 2016 Olympics, planned for insurance premiums around $66 Million and $128 Million respectively. Natural disasters, labor union strikes, and the collapse of construction financing are just some of the risks any Olympic host city has to consider.
Who Will Think of the Athletes
Athletes have several factors to deal with as well when considering what lines of coverage they need. Some have present and future professional income loss to consider, meaning they not only have to worry about normal health coverage, but they also have to bring in other long term factors that are usually considered supplemental to basic health coverages, like short and long term disability insurance.
An article from Insurance News Net states:
Nearly 11 percent of athletes suffered an injury in the 2012 London Olympics and 7 percent suffered an illness, according to a thorough study of injury reports by Lars Engebretsen of the University of Oslo in Norway. - Insurance News Net, “For Olympic Athletes, Proper Insurance Coverage Is As Valuable As a Gold Medal”
Add to these stats the fact that there is great concern over the Zika virus, for which Brazil has over 78,000 confirmed cases with 170,000 more suspected by the Pan American Health Organization, and you get a large potential for illness or injury as an Olympic athlete.
While the majority of athletes are required to carry their own line of personal insurance for such concerns, some organizations offer supplements to athletes, such as the NCAA does for a portion of its student athletes. With programs such as the Exceptional Student-Athlete Disability Insurance Program and the Division I Student Assistance Fund, the NCAA helps cover athletes against injuries, disabilities, and some supplemental issues that could arise while participating in the Olympic Games.
So there you have it. From the medals, to the venues, down to the athletes' muscles, the Olympics are covered, quite literally, from head to toe.
Further Reading
For Olympic Athletes, Proper Insurance Coverage Is As Valuable As A Gold Medal
Insuring the Olympic Games: Major Risks, Much Secrecy, Heavy Coverage
Insurance for Olympics won’t cover every risk
Here's How Much an Olympic Gold Medal Is Really Worth
Rio 2016: Economists question wisdom of hosting Olympics
The 2016 Rio Summer Olympics: By The Numbers
2016 Summer Olympics- Wikipedia
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