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How do you insure an event like the World Cup?

How do you insure an event like the World Cup? | Insurance Business UK

How do you insure an event like the World Cup?

With thousands of attendees and millions more tuning in to watch, the World Cup is currently under the global spotlight.

But in a climate of heightened terrorism fears, and following recent attacks on crowds such as the 2017 Las Vegas shooting in which a gunman opened fire at a music festival, having the right security and risk management plan around an event of any size is critical.

“Any organisation that is going to be hosting a large mass of people – everything from a stadium, to a concert, to a rally, to a political conference – needs to be thinking about this. This is a global issue,” Glenn Chavious, global sports & recreation practice leader at brokerage Industria Risk & Insurance Services, said.

“In designing an overall risk management and security program, a lot of folks have been informal about it in the past. They are going to have to become more formal, and more detail oriented,” he told Insurance Business. “For an event such as the Olympics or the World Cup, those are years in planning beforehand. And in today’s day and age, organisers of events of all sizes need to get ahead.”

Today, the advancement of technology presents both threats and opportunities when it comes to managing the risks involved in hosting large groups of people.

“The criminals and terrorists that are targeting these types of venues are actually using advanced technologies now. It is not just about a random person with a firearm or weapon any longer, this is everything from biological warfare to nuclear warfare, believe it or not,” explained Chavious.

As a result, properly-trained security professionals are often needed, particularly for large-scale events.

“This is about having true security professionals… Those individuals are going to understand the risks and threats better than any insurance professional or executive out there. You have to create a corollary between insurance, risk management and security,” he said.

But alongside emerging risks, technology has also brought about new security measures, such as using drones for surveillance inside an event, and being able to quickly communicate with event-goers through dedicated apps.

Clearly, the main concern is preventing injury and keeping people safe. But that comes with business risk, too.

“Not only is there an injury risk, but there is a huge financial risk from an enterprise, organisational side… People won’t attend and spend money at an event they aren’t feeling safe at,” Chavious said.

There is also considerable reputational risk should an event occur, which could result in businesses losing customers and market share.

Specialist brokers have a key role to play in helping clients develop a well-rounded risk management program, according to Chavious.

“The broker should really be giving advice and consulting around the potential risks and helping the insured to identify some of these risks. The broker isn’t going to have the security expertise, but they should have a partner that is able to provide them that to help a potential client. Security really integrates with risk management in this area,” he said.

And while having an insurance policy in place is important, it should be viewed as a “last stop”: “Programs should really be designed from a risk management perspective, not expecting that insurance will need to respond,” Chavious said.

“Insurance is a risk transfer mechanism [which you only turn to] if something has already happened. We need to get ahead of that.”


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