Given the scale of the event, its insurance needs are also spectacular. For this World Cup, FIFA has earmarked $134 million alone for insurance for clubs whose players get injured – more than a quarter of the prize money on offer to the 32 competing teams.
This is just the tip of the iceberg. By the time Messi, Ronaldo & Co take to the field on one of the 12 venues in Russia, almost every aspect will be covered. “In terms of insurance, the World Cup is not significantly different to the Olympics,” says Furtschegger, who assesses the risks of massive music concerts and tours, sports or corporate events and develops tailored insurance policies for the organizations involved.
The World Cup and the Olympics are always on the radar. Staging either is an enormous risk for both the host country and organizers. The final bill for Russia is expected to be around $11.8 billion, excluding some new stadiums and costly infrastructure. There is also big money at stake from companies: advertising, broadcasting rights and sponsorship.
The cost of cancellation or postponement due to a natural catastrophe, infrastructure failure or a terror attack is great. Both Russia and FIFA have insurance that pays out if a game is abandoned or moved to another location, or if the World Cup is canceled.
While the World Cup has yet to be disrupted, an outbreak of foot-and-mouth disease in 2001 caused several Six Nations rugby games to be postponed. In 2011, an earthquake hit Christchurch in New Zealand, forcing eight games of the Rugby World Cup scheduled for later that year to be shifted. Organizers were forced to offer ticketholders either refunds or new tickets at the other venues, hurting revenue. Here, contingency insurance protected against the fallout.
Among those who buy covers for such events are broadcasters, sponsors, travel firms, airlines and retailers. Lloyds estimates the total insurance for the 2010 World Cup in South Africa at $9 billion - $4.8 billion for stadiums and training venues and $4.2 billion for linked business opportunities.
Some of these opportunities you wouldn’t even think of, says Furtschegger. "Take telecast rights. If the opening ceremony is delayed even by a few minutes by something as simple as transmission failure, that could affect the broadcasters because they've got advertising slots in place. There are insurance solutions covering such an interruption.”