With the 2008 Olympic Games set to begin in Beijing, China on Friday, August 8, the International Olympic Committee (“IOC”) has opted to purchase cancellation and abandonment insurance with policy limits of $415 million, more than double the policy limits for the last two Olympic Games combined. For the Olympic Games in Turin in 2006 and in Athens in 2004, the IOC purchased insurance policies with policy limits of only $150 million and $170 million, respectively. The insurance policies purchased by the IOC would protect against financial losses should the Olympic Games be forced to shut down prior to August 24th, their scheduled conclusion. The higher limits for the Beijing Games are primarily due to environmental and political concerns.
Last May, China suffered an earthquake with a magnitude of 7.9. While the epicenter of that earthquake was approximately 1,000 miles from Beijing, there have been earthquakes within 100 miles of the city as recently as 1976. Earthquakes and other natural disasters, such as floods or typhoons, are covered in the IOC’s policies. There have also been many reports regarding Beijing's poor air quality. Chinese officials have taken several steps to reduce the amount of smog, including limiting the number of vehicles on local roads. The policies obtained by the IOC, however, do not provide coverage for air pollution because the IOC intends to rely on its prior experience with rescheduling events due to weather if they are forced to reschedule an event due to poor air quality.
Of great concern to IOC officials are potential disruptions from protestors and/or terrorists that could cause the Olympic Games to be cancelled. China’s policies on Tibet and human rights have led to numerous protests. Last March, there were anti-Chinese riots in Tibet’s capital city, and last April, the Chinese government stated that suicide attacks by Tibetan separatist groups could occur during the games. Furthermore, the Olympic torch relay was interrupted several times by Tibetan protestors, and more protests are planned for the 18 days of Olympic Games. The policies purchased by the IOC would cover losses related to these types of events should they be severe enough to cause the Olympic Games to be cancelled.