COVID-19 has wreaked havoc on events around the world, from sports tournaments to festivals to anything in between.
The measures taken by governments, e.g. preventing gatherings and limiting international travel, have meant that most, if not all such events have either been cancelled or are at risk of being cancelled.
Grand Slam tournaments figure among the casualties.
Enter Event Cancellation insurance. Covered or not covered? That, of course, will depend on policy wordings.
The oldest, and arguably the most prestigious of the four Grand Slam tournaments, the Wimbledon Championships have been cancelled for the first time since WWII, 1945 to be exact. Seventeen years ago, with the outbreak of SARS, the organizers, the All England Club decided it was a good idea to include pandemic coverage in their policy, paying around USD2 Million in premiums per year. A decision that has clearly paid-off.
Originally set to take place from June 29 to July 12, a postponement would’ve been difficult, the best time for playing on grass courts being between spring and summer. Furthermore, a postponement wouldn’t have triggered the insurance policy.
Estimated Insurance payout: USD141 Million
Total premiums paid: USD34 Million
By contrast, the French Tennis Federation, whose policy does not cover pandemics, has been struggling. The Roland-Garross championship has been postponed from May to September 20, a date likely to be reported once more, till September 27. Conflicting dates with the US Open, another Grand Slam tournament, could see the players too tired to play two tournaments back-to-back.
Estimated tournament revenue: USD300 Million.
Held in late August/early September, its fate is still undetermined. The United States Tennis Association will reportedly make a decision around June. Like the French Open, their event cancellation policy does not cover pandemics. The USTA is said to be desperate to play somehow, even if behind closed doors. Cancelling the event will see many people lose their jobs as a result.
Estimated tournament revenue: USD350 Million
Tennis Australia is in a unique position. The tournament has already taken place in January, albeit it wasn’t smooth sailing either because of the smoke generated by the Australian bush fires.
Interestingly, they do have pandemic coverage. However, their policy expires in July. They are currently making plans for the 2021 season, which may or may not be affected by the virus. Renewal negotiations are underway.
Pandemic cover is optional, meaning that it can only be obtained at additional premium. The decision to go without could’ve been financially driven. Another reason may be that the brokers did not recommend it, which could spell trouble to the broker and cause another policy to be triggered, the Broker PI insurance.
Moving forward, however, most insurers are not keen on providing pandemic cover.
It would be interesting to see how all this will unfold.
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