LONDON — Guarding against terrorism and natural disasters in Athens, the IOC took the unprecedented step of buying insurance in case the Olympics are called off.
The International Olympic Committee’s $170million policy guarantees the organization and affiliated national committees and sports federations have enough money to continue operations. The policy would not compensate individual victims.
The policy also doesn’t cover corporate sponsors and TV networks, which have billions of dollars riding on the Athens Games. Many have their own insurance, and city organizers underwrite their own liability coverage.
IOC president Jacques Rogge said yesterday insurance was “standard prudent judgment” and reflects no lack of confidence in the Aug.13-29 games, which have been troubled by construction delays and security worries.
The IOC would not be covered if the games are called off because of the delays, IOC finance chairman Richard Carrion said.
The Athens Olympics, the first Summer Games since the September11 terrorist attacks, will be the most heavily guarded in history. The security budget is nearing $1billion — more than three times the amount spent on protecting the 2000 Sydney Games.
Aside from terrorism, insurance experts say the main risk in Athens would be from earthquakes. The city straddles a fault line, and 143 people died in a quake in 1999.
Athens 2004 spokesman Stratos Safioleas said the organizing committee had no comment “on an IOC policy that concerns not just Athens, but the Olympic Games in general.”
The IOC is paying about $6.8million for the policy, and the syndicate is led by New York-based insurance giant American International Group Inc., according to two Olympic sources who spoke on condition of anonymity.
Joe Norton, spokesman for AIG in New York, declined to comment, saying the company had a policy of not breaching clients’ confidentiality.
The policy covers full and partial cancellation for a “whole range of issues such as terrorism, earthquake, flooding, landslides, things like that,” Rogge told the Associated Press by phone from Lausanne, Switzerland.
Carrion said the IOC negotiated the bulk of the coverage before the March11 bombings in Madrid, Spain, that killed 191 people.
Rogge said the IOC also will negotiate individual cancellation policies for future Olympics, including the 2006 Winter Games in Turin, Italy, 2008 Summer Games in Beijing and 2010 Winter Olympics in Vancouver.
Rogge said security has long been the IOC’s top priority and that Greece has done “everything humanly possible” to safeguard the games.
The Athens policy protects the bulk of the 28 international sports federations on the Olympic program and the 202 national Olympic committees represented at the games. Many of those organizations rely heavily on games-related revenue.
Rogge said the IOC needs more than $200million to keep running in the event of cancellation, and it has about $160million in financial reserves.
“We will certainly have the required amount after the successful completion of the Athens Games,” Carrion said.
Rogge said the IOC began exploring insurance coverage in 2001, but the industry was reluctant to offer terrorism coverage after the September11 attacks. The IOC had no coverage for the 2002 Winter Games in Salt Lake City.
Carrion said the IOC also considered taking out a credit line to absorb the bulk of the risk, or a combined insurance-credit arrangement for Athens and Beijing. The executive board decided in February to go with the standard contingency insurance.