From the world famous Melbourne Cup to the Australian Open, the Grand Prix and The Ashes, the Australian sporting events industry generates billions of dollars in revenue every year. These huge events, as well as more modest local sporting activities are enjoyed Australia-wide. Whether big or small, the organisers of these events are exposed to a number of unpredictable risks.
Sporting Event Risks
The amount and type of risks organisers are exposed to is dependent on the size of the event, the location, and the sport. Event organisers should understand the specific risks involved with their sporting event in order to incorporate an effective risk management strategy that covers their assets in the event of cancelation or disruption.
High profile sporting events have been widely affected by a number of different risks in recent years. Although your next event is probably on a smaller scale, the following examples illustrate risks that could potentially affect your next event.
• Severe Weather: Flooding, high winds or extreme temperatures are more likely to affect outdoor events. In 2014, the World Cup qualifier between the US and Costa Rica was played during a serious blizzard in Colorado. Costa Rica is now considering a formal protest due to the conditions.
• Natural Disasters: Natural catastrophes are particularly difficult to account for, as they can be highly unpredictable threats. Depending on the location of your event and the time of year, more extreme catastrophes such as earthquakes, tornadoes or tropical storms could have a huge impact.
• Outbreak of Disease: The 2014 Commonwealth Games in Glasgow saw an outbreak of Norovirus amongst the athletes. In such close proximity, contagious bugs are very likely to spread widely, very quickly which can seriously disrupt the entire sporting event.
• Transport Disruption: The world cup in Brazil 2014 was threatened by severe transport disruption as airports were deemed not large enough to accommodate the influx of visitors. Problems with public transport or severe traffic jams have the ability to delay any event.
• Terrorism / Political Violence: The risk of terrorism and political violence at sporting events has grown in prominence as high profile events become a likely target for this type of attack. The 2001 Ryder Cup had to be rescheduled to take place the following year after the 9/11 attacks in New York.
Reducing the Risk to Your Organisation
Cancellation, postponement and delays to an event can have huge financial impact for the organisers and sponsors. Situations that are out with the control of the organiser can result in high costs and serious losses in revenue. In addition, the organiser may be held liable for any costs incurred by other parties including sports teams and media networks.
As the number of sports events and the money invested in them is on the increase, the risks are becoming more prominent and more diverse. You must be sure that your insurance provides coverage for financial exposures such as contractual liabilities, lost revenues and ticket refunds. Worldwide Sports Insurance is Australia’s leading provider of sports insurance. With extensive experience industry wide, speak to one of their brokers about insurance for your next sporting event.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.
