The 2018 Winter Olympics bring in the usual risks associated with the Olympic Games, but this year the location and political climate of the host country adds some risks that insurers are not necessarily accustomed to. Along with the normal risks; event cancellation, exposure, abandonment, and terrorism coverage (as the risk of a terrorist attack becomes higher and higher with each Olympic Games), this year the necessity of cyber-insurance has already made itself evident with the “Olympic Destroyer” cyber-attack that occurred during the opening ceremony of the Games when hackers detonated probes inside the network. Reuters has reported that the International Olympic Committee (IOC) alone has taken out protection for around $800 million for the Olympic Games, covering the majority of the roughly $1 billion investment that the IOC made in the host city. Here is a breakdown of the types of insurance necessary to run a successful Winter Olympic Games.

There are monumental risks accompanying the major task of construction and infrastructure development of the Olympic arena. Construction insurance is purchased in order to guarantee the financing and completion of athletic and non-athletic venues. Construction insurance is necessary as almost 3,000 Olympians will be competing in fifteen different winter sports, all of which require specific athletic centers, including the Alpensia Biathlon Centre, the Olympic Sliding Centre, the Phoenix Snow Park, the Jeongseon Alpine Center, and specific arenas for hockey, curling, and ice skating. There were also several non-athletic venues that were necessary to construct for the 2018 games, including the Olympic Village, the Olympic Stadium, and areas for press and international broadcasting. The insurance necessary for the construction of all of these specific areas can differ, but we can assume it was definitely costly.

Private Developer insurance includes surety and performance bonds, liability insurance, builders' risk insurance, and bid bonds. These types of insurance protect from the various “what if” scenarios that range from overspending on the build itself, to the destruction of people or property during the construction of the Olympic Games Arena. These “what if” scenarios become more realistic during a construction such as the Olympic Arena, which has a very strict deadline. When construction projects are rushed, there is an increased probability that mistakes will happen leading to unsure construction or personal injury to the construction workers. With the Olympic Stadium holding 35,000 people, a mistake in construction could lead to monumental bodily injury on top of the property damage. If there's anything wrong with the ice, for instance, and an Olympian catches an uneven edge while practicing or performing a choreographed routine, they could tear an ACL, ruining their career as an ice skater and their chances to medal as an Olympian. Such a devastating injury caused only by uneven ice could easily lead to a major lawsuit for a world class athlete, and claims from such an injury can become monumental, including bodily injury, medical payments, mental anguish, loss of future earnings, and loss of endorsement.

During the Games, the Olympians themselves are often covered by insurance policies. Olympians need to train daily, often pushing their bodies to the limit, and they need assurance that any damage they are doing to their bodies, on behalf of their Country, is covered. Olympians that are members of Team USA receive full health insurance coverage during the Olympic Games, compliments of the U.S. Olympic Committee. We hope that the Austrian snowboarder, Markus Schairer, has good medical coverage, after he broke his neck during a quarterfinals competition on Thursday of the first week of the Winter Olympic Games. Luckily, his injury did not cause neurological or permanent damage, but we can assume that the international medical bills for the injury will be expensive.

Since acts of terrorism or war are generally excluded, political risk insurance, which covers disruption from terrorism or war, is offered as a standalone policy, or an add-on to property insurance. A political risk policy will also generally cover accident and health risks. At these Olympic Games, the risk of terrorism or war is higher than usual as two of the participating countries, North Korea and the United States, have recently exchanged nuclear threats, and North Korea and South Korea are technically still “at war”. Both of the Koreas, though, have made a decided effort to use the games as a way to re-connect the other, marching as a unit in the Parade of Nations and participating jointly in women's ice hockey.

Cyber insurance deals with some uncharted territory, including clashes between different lines of business, coverage of contingent business interruption, outages of external networks and internet, and security gaps. The increased connectivity and use of technology during the games has opened up more vulnerabilities and the potential for cyberattacks. With the heightened threat of a cyber-attack this year, South Korea has stated that they took extra measures to try to ensure the safety of the Winter Games. We were shown the reality of the threat of a cyber-attack on the Winter Games first-hand last week when hackers attacked the Opening Ceremony with malware called “Olympic Destroyer”, which was intended to cause “disruption and embarrassment” during the opening ceremony. Media outlets had issues reporting on the amazing event because the attack knocked out the stadium's Wi-fi. In an event like this, transmission failure coverage is a good policy for broadcasters to have in place.

As PC360 has reported previously, Olympic medal insurance is also necessary as several American Olympians have suffered from a misplaced, lost, or stolen medal. For years, Liberty Mutual has insured each gold, silver, and bronze medal won by U.S. athletes, noting how meaningful every medal is to the country and the athlete who earned the right to wear it for their country. The company will continue to provide coverage for all medals through 2020. With medal insurance in place, an athlete will be able to replace a lost or damaged medal at no additional cost to them.

Although no existing policy provides coverage for every aspect of the Olympic Games, piecing together insurance policies in this manner is an effective way to ensure that there is coverage for the Olympic Games, from start to finish, and from head to toe, keeping the host country, and the world's best athletes safe.