Football, tennis or ski jumping – in many kinds of sports nowadays it’s not only about winning, records and rankings any more, but at the same time about record-breaking transfer payments, club budgets and endorsement contracts. The field of sports has gained a huge economic dimension. The actors are increasingly faced with a number of economic risks, risks they often cannot shoulder on their own. The players, sponsors and teams therefore are in need of tailor-made coverage and protection.
Such a coverage could consist of the following components:
Sometimes it only takes one hard tackle in the penalty area, and a serious injury received there can put an abrupt end to a career. For many athletes this also means the loss of their livelihood. A sports disability insurance cannot bring back health, but it will ensure your future financially. It is not only a sensible precaution from the athlete’s point of view, but also for the team or club in question, as the loss of a top performer will inevitably leave deep traces in the books of any club.
There will always be some residual risk to the organisation of an open-air sports event, no matter how perfectly organised. An adverse weather condition for example could make a ski slope unusable. A stadium might have to be cleared due to a bomb threat. There are many reasons which can lead to the cancellation, interruption, postponement or relocation of a match or competition. An event cancellation insurance will help to cover the financial risks arising from such an incident.
Revenue from TV broadcasts has long since become a fix asset in the financial planning of many sports clubs. But what if they fail to come? You can never rule out some technical breakdown during broadcast. If a competition or match is not shown, there won’t just be a frustrated audience, but the financial loss for the host, the marketing agency or TV station will be just as great, depending on who is going to be held responsible for the financial losses. An insurance for the loss of TV broadcast revenues can help to lower such a risk.
The sponsors of a winter sports event were supposed to appear on a big advertising panel behind the podium for the award ceremony. But a sudden storm swept away both podium and advertising panel. The award ceremony had to take place on a makeshift rostrum. The sponsors were therefore not visible, and demanded a refund. In this case, an advertising loss insurance will take over.
The picture went deep into the heart of the fans: The players were clinging to each other, sobbing uncontrollably, when the club was relegated. Such situations make up the appeal of a sport, but for the executives and people in charge in the teams they are the worst case. They can undo any long-term financial planning in an instant. A prize indemnity insurance will help minimise the financial consequences of a relegation. And it will also help in case of promotion, if for example suddenly bonuses have to be paid.
When our star got in trouble with the Finance Court, his advertising slogan “I’m on” suddenly acquired a whole new meaning. Which made his main sponsor quickly get rid of this promoter. Advertising campaigns concentrating on one famous person only face a high risk: if they have to be stopped because of a flaw in the star’s image or, even worse, because something happened to the star himself, then all the pre-production costs for the campaign will go down the drain. A death and disgrace insurance will cover such a case and make up for the loss.
Nobody wants them, but they do exist: fans whose only aim is to destroy and damage, the so-called hooligans. The damage they create can be considerable, and it’s usually not them who pay. A sports facilities all-risks insurance will cover damages within and to sports facilities.
Star athletes can afford to ask for a lot of money just for taking part in a competition. But what if due to an illness they are not able to compete? Is there a chance to get back the attendance bonus paid? After all, many spectators come to the stadium especially to see the stars. With an attendance bonus coverage, the organiser is on the safe side.
The stage supplier didn’t manage to get his equipment to the location in time. So they had to hire another supplier at short notice, who in turn was well aware of the difficult position the organisers were in - and he used this knowledge well when he fixed his price. This annoyed the organiser, and they sued the original supplier for breech of contract. As the organiser had a defence insurance, the value of the claim was no problem, despite the otherwise difficult financial situation. This insurance will also help with lawsuits of members of staff before the labour court or with other legal disputes.
The organisers were surprised by the masses of visitors, their safety arrangements were not sufficient for that. One grandstand broke down, a tumult followed, and as a result many people were injured. For such damages, the organiser is liable without limit according to German law. The financial liability at least can be covered by an organiser’s liability insurance.
Sports is no longer just about winning, but also about a lot of money. Players are bought and sold, licences granted, rights marketed. For clubs, enterprises, associations and agencies this means good business and money, but also new risks. Rights can be violated, partners may make claims due to financial losses; all this can turn into a financial burden far higher than the available budget. An indemnity insurance will limit such existential threats.
No manager nowadays will take over any leading position without a D & O insurance (directors and officers liability insurance). The voluntary directors of a sports club have comparable risks, but only very few can boast a D & O insurance here. At the same time, they can be made liable with their private property to the same extent as any company director, if claims are raised against them due to financial losses. A D & O insurance will insure them against this risk. The same goes naturally for professional sports managers.