The International Olympics Committee has event coverage, but it isn’t clear if delays are covered.
The IOC is seeking a postponement insurance claim for the delayed Tokyo Olympics. That said, while the policy does provide coverage against cancellation of the games, it isn’t immediately obvious whether protection extends to a delay.
The IOC is currently in “open discussion” with its insurance brokers over the situation.
Pierre Ducrey, the Olympic Games operations director at the IOC said that they are currently in an “open discussion” with their insurance brokers. The goal of the talks is “to try to find the right level of compensation to help us bear the cost of having to wait another hear,” he explained. Though cancellation coverage is common for event organizers, postponement insurance for a situation such as this pandemic is new territory.
The IOC’s annual cancellation policies came with premiums totalling about $14.4 million for the Rio de Janeiro Olympics in 2016. The PyeongChang Winter Games in 2018 were slightly less expensive, with premiums totalling about $12.8 million. In May, the IOC said it had put $650 million aside to cover its own additional delay-related costs.
That said, organizers are expecting that the costs associated with delaying the games in Japan will likely be in the billions of dollars. Taxpayers in the country will face the majority of that bill.
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The main expense will be retaining the Olympic Village which is likely without postponement insurance.
According to Ducrey, the costliest expense associated with delaying the games by a year will be retaining the Olympic Village throughout that time. The Tokyo Bay complex is home to over 5,600 apartments and is “a fundamental piece of being able to deliver the games,” said Ducrey. About a quarter of those units had already been pre-sold to people who will move in after the Olympics. Those buyers will need to be compensated for having to wait an additional year before they can take possession of their new homes.
“Obviously you have planned your whole life about getting this apartment at that point in time,” said Ducrey. “Now we have to tell all of these owners, ‘Oh, sorry. Your apartment will be delivered to you a year later.’… It is a huge change and requires a number of compensations and discussions.”
The goal is now to find a fair and reasonable postponement insurance settlement to make it possible or a “streamlined and simplified” games to take place next year with reduced costs and fewer fans in venues.