There has been unprecedented weather across the globe in the past 12 months and the last decade’s data has shown weather occurrences are becoming wilder and more dangerous. For example, in the UK, spring brought heavy snowfall and with that unheard-of red weather warnings.
Despite advances in satellite technology aiding the Met Office, extreme weather is often unpredictable in its severity and potential consequences. Even with advance weather warnings, these are normally too little, too late as far as scheduled sports events are concerned and the risk remains outside the organisers’ control.
Whilst safety at sports events is paramount for both attendees and participants, the impact of hazardous weather can extend to road, rail and air traffic disruptions, resulting in rendering a venue inaccessible. It can also cause extensive power outages, as was the case across large areas of England and Wales when the combined forces of the ‘Beast from the East’ and ‘Storm Emma’ hit in early March.
Most often insurance policies cater to the more extreme weather that poses a common danger, but insurers can tailor bespoke terms for different sports. For example, specific criteria with regards to weather for cricket matches is often used, where cover exists only for the period before the Duckworth-Lewis method can be utilised to obtain a match result. In cricket, it’s the umpires’ decision that’s considered final in determining an insurers’ liability. This is also the case with regards to suspensions in play at tennis or golf tournaments.
At mass-participation events such as marathons, triathlons, cycling or lake swimming, it’s not only the wind, rain and snow that interferes with participants’ safety – abnormally high temperatures and humidity levels can also pose significant health risks. It’s here that Integro’s deep understanding of weather risks comes into play, resulting in the creation of bespoke policies addressing these exposures.
One of the larger cancellation insurance losses arising at a sports event was in 2012 when the New York Marathon was called off due to superstorm Sandy. A further example occurred last year, when the inaugural Virgin Sport ‘Festival of Fitness’ was cancelled in San Francisco because of poor air quality from bush fires which were as a direct result of very high temperatures and prevailing winds. And, because of the UK’s heavy spring snowfall this year, approximately 15,000 runners and 30,000 spectators were disappointed when the Bath Half Marathon had to be cancelled.
There are a few sports events – for example, golf tournaments – that can accommodate a rain delay or contingency day, but for the majority, there is no second chance.
There can be multiple losers when an event is cancelled. Depending on varying contractual arrangements with and between stakeholders, commercial loss can affect sponsors, broadcasters, vendors, merchandise suppliers and hospitality providers, amongst others. Managing the fallout from lost exposure, advertising spend and alternate revenue streams should be clarified between parties and included or excluded in the policy for contract clarity and certainty.
Careful consideration must be given not only to the financial loss but also to the challenge of effectively managing a cancellation. It is not simply the face value cost of tickets or registration fees that are incurred but the associated expense of processing refunds. Credit card commissions are deducted for the initial sale and similarly charged by vendors for the return of funds to the customer. Extra administration staff may need to be recruited for a period to manage the smooth running of the process. Updates to websites and external advertising can become necessary to clearly communicate on how to make a claim.
Generally, the public and participants are sympathetic to an organiser which cancels or is forced by a local authority not to proceed with an event for good reason but they expect the same level of customer service in reverse as they did when purchasing their ticket.
A cancellation policy and the financial support it provides to remedy a potential storm of adverse publicity is an imperative for the continuity of any sports property which values its reputation and good standing for future events.
Dani Ettridge is Business Development Executive at Integro Entertainment & Sport