The International Olympic Committee (IOC) is confident that it made the right decision in forgoing insurance coverage for the Salt Lake Games, based on the recent decision of the French insurance company AXA to cancel its $875 million coverage package on soccer’s World Cup in Japan and South Korea next year.
Thomas Bach, a lawyer on the IOC’s ruling executive board, said the IOC decided several years ago against taking out cancellation coverage. “I think the development with FIFA shows that we were right because the risks we are talking about now are not covered by insurance”, he said.
If the Salt Lake Games were canceled, the IOC would not be covered for the loss of its multimillion-dollar TV contracts.
Bach said the IOC board in September, days after the attacks in New York and Washington, decided to review insurance matters. A group is to report to the full board in December, he said.
The IOC also determined Salt Lake organizers, not the IOC, would face legal or financial liability in the event of terrorist attacks. Bach said, “the IOC from Lausanne cannot take responsibility for an event in the United States”.
The Salt Lake Organizing Committee has $150 million worth of cancellation insurance backed by Lloyd’s of London. But the Games will cost $1.3 billion, and more than half of that already has been spent, leaving SLOC under-insured. SLOC cut the coverage in half two years ago to reduce the cost of premiums.
The Salt Lake committee is “on the hook for any terrorism act that we have not prepared for”, SLOC head Mitt Romney said recently.
IOC president Jacques Rogge said he could not comment on the insurance issue until after reviewing the files next week.
