The International Olympic Committee’s consideration to ban all Russian athletes from the upcoming Summer Games in Rio de Janeiro for doping could result in plenty of dollars lost for both athletes and sponsors, says a specialty insurance expert.
Mark Woodall, president and CEO of Special Risk Insurance Managers Ltd., was heavily involved in insuring participants at the recent Pan Am games in Toronto as well as various CommonWealth Games events, and says doping allegations will likely void any sponsor-athlete contract, regardless if coverage is purchased.
“One of the worst allegations against an athlete is doping or cheating. It’s one of those things an athlete wants to avoid to all extent,” he says. “Those things are, in this day and age, are looked down upon by the public, by sponsors, and there’s not much worse the athlete can be charged with.”
The IOC has stated it is looking into its legal options to bar Russia’s entire team following a damning report released by the World Anti-Doping Agency, which proves government-enforced cheating occurred at the Sochi Winter Games, and other previous events. “(We are) exploring legal options with regard to a collective ban of all Russian athletes for Olympic Games 2016 versus the right to individual justice,” it said in a release.”
Knocking that many athletes out of the games will likely cost sponsors dearly, as most do not take out guaranteed performance cover should an endorsed athlete not be able to compete, says Woodall.
“Much of that is available but a lot of times it’s not purchased – it’s like event cancellation insurance, he says. “It’s a product that’s out there that a lot of venues don’t want to purchase the coverage, they take the risk. For the most part, sponsors do not buy guarantee of performance cover.
“A lot of the sponsors hedge their bets with multiple athletes in a particular sport. If you look at golf, certain banks in Canada sponsor eight or 10 professional golfers hoping one of them is the hot guy this week.”
The IOC has also established a new disciplinary commission, and has already banned all Russian sports officials from attending the games. It will also not sponsor or organize any sporting events in Russia through to December 31.
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