How Risky is the Super Bowl?

Take away the Superbowl‘s invitation to gorge on heart-stopping but nevertheless irresistible snacks, all the billion-dollar ads, the ridiculous hype and fanfare, the obliging celebrities and the general over-the-topness of the whole thing and what have you got?  That’s right, an insurance bonanza!

This annual event is an insurance broker’s dream – or nightmare, depending on the outcome.  Granted, insurance stuff is rarely thrilling.  But think of the scale of the thing.  Think of coordinating all the events and players and schedules.  Indianapolis is hosting a huge party and some 150,000 guests are expected.  The streets and roads will be jammed and more accidents are bound to happen; hotels and restaurants and bars will be packed to overflowing – peacekeeping and fan management will be an issue.  By the time of the actual game on February 5th, the city’s infrastructure will have been seriously challenged.  Sure, there’s the chance that $200,000 million will be spent there, but that’s not all easy money.

There are weather issues (remember Dallas last year? the snowstorm that nearly postponed everything?), and crowd control and transport issues, backup plans for emergencies, protection for dignitaries, contingencies for contingencies.  And then there’s the actual insurance.

The general liability coverage alone for the Super Bowl  can run up to some $100 million.  That’s a hefty premium.   A risk of this size, of course, is not taken on by a single carrier.  The policy is typically written with a primary layer, along with excess layers between $10 million and $50 million – still hefty numbers.  This spreads the risk around – a good plan.  And the general liability is actually pretty easy to insure.  Imaging coordinating all the other moving parts that make up this ever-grander event.

Here are the basic elements of SB risk management: coverage for

  1. Event cancellation: Bad weather is just one thing that could ruin all the plans and cancel a major event.  There could be problems with the playing field or building, or a plane crash or a national emergency.  Things happen.
  2. Media liability:  The Super Bowl is one of the biggest media events of the year.  Everyone wants the kind of exposure that being seen at a game watched by an estimated 111 million people.  But then again, we all remember the aftermath of the Janet Jackson/Justin Timberlake incident.  And it’s Madonna this time!
  3. General liability: Who know’s what could go wrong on the NFL’s biggest day?
  4. Corporate liability: Lots of corporate leaders escort favorite clients and celebrities to these events, wining and dining these guests, and putting them up in fancy suites.  Suppose there’s a drunken brawl or a client oversteps or there’s an accident while en route?
  5. Special events coverage: There will be lots of special events for the fans: a 50-yard dash for kids, pass-catch competitions and so on.  Again, things happen.
  6. Prize indemnity: Lots of organizations offer Super Bowl-related sweepstakes and contests.  Should there be a big winner, it would be a good idea to be able to award the prize.
  7. Liquor liability: This one is pretty obvious –  servers all over Indianapolis beware!
  8. Advertising liability: If a one-minute ad during the Super Bowl costs up to $3 million, it only makes sense that those advertisers would spend just a little bit more to protect that investment!
  9. Terrorism: High-profile events and gatherings are, unfortunately, targets for those with sinister intent.
  10. Directors and officers liability: This year, the host committee is from Lucas Oil Stadium, Indianapolis.  And of course they’ll need to protect themselves in their host capacity.  Because one last time, things happen.

Enjoy the game!


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