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End of the game for sports betting on corona virus insurance

LONDON (Reuters) – Major sporting events that are slated to restart after the coronavirus crisis will likely have to do so without insurance against communicable diseases, as insurers remove coverage or increase costs.

FILE PHOTO: Tennis – Wimbledon General Views – All England Lawn Tennis and Croquet Club, London, UK – June 28th 2020 General view of social distancing signs at All England Lawn Tennis Club REUTERS / Toby Melville

Although the Wimbledon tennis championships will be covered by an existing pandemic policy after the event’s cancellation this week due to the outbreak of the corona virus, the organizers say they cannot get similar coverage next year.

“All of the policies that we are currently seeing are completely non-communicable,” said Warren Harper, sports and events manager in the international division of insurance broker Marsh.

World Athletics also said that, as far as known, insurance policies for the corona virus are no longer available.

This reluctance to provide cover is due to the fact that Lloyd’s of London has estimated that insurers worldwide will make $ 100 billion in payments this year, including for sports, music, due to the coronavirus pandemic – and industry events.

And insurers say they need government help to ensure pandemic coverage as sports groups try to plan future tournaments after much of the 2020 schedule list has been canceled.

Although only major sports competitions typically buy “communicable disease” coverage that complements a cancellation policy, they typically do so at least a year in advance, insurers and brokers said.

This means that some tournaments that take place this year or even 2021 can still claim.

Two major U.S. golf tournaments have coverage for 2020, said Simon Henderson, general manager of Broker Gallagher’s sports practice, without naming them for reasons of customer confidentiality.

The golf association PGA of America declined to comment on its insurance, while PGA Tour stated that it had not taken out cancellation insurance for all tours, but had to buy it “regularly”.

‘INEXPENSIBLE’

Brokers said the few insurers that still offer communicable disease coverage require an upfront premium of up to 50% of the sums insured compared to a fraction of a percentage point before the pandemic, and few are expected to pay them.

The Australian Open said that although there was pandemic coverage for previous tournaments, including 2020, the situation made it “unaffordable in the future, certainly short term”.

Due to a lack of insurance, some organizers are keeping their fingers crossed so that they can hold their events.

“Of course, the organizers are planning for the future, but they are unable to get coverage for communicable diseases – they basically do so at their own risk,” said a senior insurer.

Some events and their suppliers may be based on force majeure clauses that allow both parties to go away, recover some costs, and eliminate the risk of legal action.

But brokers say that such clauses vary and do not include all epidemics. Unlike with cancellation insurance, the organizers could not use such clauses to claim lost earnings such as ticket sales.

Premiums for non-communicable disease policies have also increased by at least 50% as competition fades. Lloyd’s of London’s insurer, Markel, has discontinued event cancellation insurance, with more expected to follow.

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Since the countries are no longer blocked, the games are usually played behind closed doors and displayed online. This means that the insurance sums are lower due to the lack of spectators and the organizers no longer take out liability insurance against injuries.

This change in fans’ perspective on their sport means that insurers offer additional coverage for transmission errors or interruptions in live streaming games, said Leigh Ann Rossi, chief operating officer of broker BWD Sports and Entertainment.

“Some TV contracts are so lucrative that lost ticket sales don’t affect the budget as much,” said Rossi.

Additional reporting by Suzanne Barlyn, Simon Jennings, Rohith Nair and Shrivathsa Sridhar; Edited by Alexander Smith

Our standards:The Thomson Reuters Trust Principles.

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