Sports fanatics and event organisers alike are hoping for a hot and dry summer 2009.
The UK summer is here and that means Wimbledon, strawberries and cream, trips to the seaside, barbecues and picnics in the park, right?
Well maybe in an ideal world. As anyone who has ever experienced a British summer knows only too well, just as you’re slapping on the sun cream the rain clouds can roll in.
For most of us, a bit of rain just spoils our fun. But for the big sporting events coming up over the summer, there is a lot more at stake.
The British Grand Prix, Wimbledon, the Open Championship and the Ashes Test Series among others are big business, with event organisers, sponsors and advertisers keen to see a return on their investment.
Cover against cancellation
Event cancellation insurance provides such stakeholders with protection if things go wrong.
“All large sporting events need insurance,” says David Bruce, a contingency underwriter and the divisional head of specialty at Hiscox. “If it can go wrong then it will go wrong.”
Cover can be tailored to the event. Sums insured can range from £2,000 for a garden fete to £2bn for a major sporting event like the Olympics.
Wimbeldon's weather stopper
For Wimbledon at least, this year’s finals will not be plagued with the stopping and starting that has characterised some of the wetter finals in the past.
Centre Court has a brand new retractable roof – the cost of which is closely guarded – which can be closed if the heavens open. But as it only covers Centre Court, other matches will remain at the mercy of mother nature.
Blame it on the weather
One of the biggest risks open-air sports events face is bad weather. “If you are televising a golfing tournament and you have a live feed, what you don’t really want is early morning fog because you can’t get your picture across,” says Bruce.
While the golfers themselves can cope with strong winds – with golf courses like St Andrews famed for their windswept beauty – these are less than ideal conditions for the organisers. “You don’t really want a windstorm because then you find that the tented village, where you’re doing all your hosting, blows away.”
Events might want to take out catastrophe cover against extreme events, such as windstorms, earthquakes and floods.
Summer flooding in 2007 cost UK insurers £3bn and led to the cancellation of a large number of events.
Other perils
Beyond weather-related risks, other perils such as terrorism, withdrawal of competitors and even pandemics can be covered. TV transmission failure or the interruption of a live broadcast due to major breaking news can also be covered.
Swine Flu has prompted a number of clients to request pandemic cover for this year, Bruce reveals.
Each event has different needs and even for the same event, the cover will vary depending on who is requesting it.
“From a sponsor to a TV company to an advertiser to a host nation and an event organiser – they all want slightly different coverages,” Bruce explains. “That’s what’s exciting about it. Our job is to tailor make their policy to cover their downside. They all need cancellation and abandonment insurance, some of them need weather, some need natural perils cover and some of them want terrorism.”
Lessons in risk management
Insurance can provide protection in case things go wrong, but effective risk management is also essential.
Contingency planning, emerging response plans and security assessments are all crucial for events involving large numbers of people.
For mega-events like the Olympics, a risk management framework can take up to two to three years to implement.
“The nice thing about insuring major events is that they are superbly arranged,” says Bruce. “People are exceptionally proud that they will go off without a hitch and so all the arrangements they could possibly put in place are in place.”
But a professional approach to risk management is not always enough. In 1996 a pipe bomb was set off in the Centennial Olympic Park at the Atlanta Olympic Games, killing two people. The games continued as planned but not without disruption.
The dramatic hostage taking and murder of 11 Israeli athletes at the 1972 Olympics may have occurred in another era, but it too remains an important lesson in risk and security management.
What the weatherman says
After two washout summers in 2007 and 2008, the Met Office is predicting 'a barbecue summer' for 2009.
“The signs are much more promising this year,” Ewen McCallum, chief meteorologist at the Met Office, says. “We can expect times when temperatures will be above 30°C, something we hardly saw at all last year.”
While all this bodes well, it does not rule out heavy downpours and other bad weather.
“Our long-range forecasts are proving useful to a range of people, such as emergency planners and the water industry, in order to help them plan ahead. They are not forecasts which can be used to plan a summer holiday or inform an outdoor event,” Rob Varley, government services director, warns.
