IOC gets cancellation insurance for Athens Olympics

LONDON -- For the first time, international Olympic officials have taken out cancellation insurance: a $170 million policy to protect against the Athens Games being called off because of war, terrorism or natural disasters.

The policy is not to compensate individual victims of any disaster, but to guarantee that the International Olympic Committee and its affiliated bodies have enough money to continue operations.

The Athens Olympics, the first summer games since the Sept. 11 terror attacks, will be the most heavily guarded in history. The security budget is nearing $1 billion -- more than three times the amount spent on protecting the 2000 Sydney Games.

IOC president Jacques Rogge told The Associated Press the move represents "standard prudent judgment" and does not reflect any lack of confidence in the Aug. 13-29 Athens Games, which have been troubled by construction delays and security worries.

The policy covers full and partial cancellation of the games for a "whole range of issues such as terrorism, earthquake, flooding, landslides, things like that," Rogge said by phone from Lausanne, Switzerland.

The IOC policy does not cover corporate sponsors or television networks, which have billions of dollars riding on the games. Many have their own insurance. Host city organizers also underwrite their own liability coverage.

IOC finance chairman Richard Carrion, who led the negotiations, said the scenario of Olympic venues not being ready on time is not covered by the policy.

"It is specifically excluded," he told the AP.

The possibility of teams not showing up for the games is also not covered, Carrion said.

The IOC is paying around $6.8 million for the policy, and the syndicate is led by New York-based insurance giant AIG, according to two Olympic sources who spoke on condition of anonymity.

AIG had no immediate comment.

The Athens policy also protects the bulk of the 28 international sports federations on the Olympic program and the 202 national Olympic committees sending teams to the games. Many of those organizations rely heavily on games-related revenue for their existence.

The policy is meant to ensure that the IOC and Olympic sports bodies can continue to operate for another four-year Olympic cycle if the games are called off.

Rogge said the IOC needs just over $200 million to keep running in the event of cancellation. The committee already has around $160 million in financial reserves.

"We will certainly have the required amount after the successful completion of the Athens Games," Carrion said.

The IOC said it will also negotiate individual cancellation policies for future Olympics, including the 2006 Winter Games in Turin, Italy, 2008 Summer Games in Beijing and 2010 Winter Olympics in Vancouver.

Rogge said the IOC began exploring the possibility of taking out insurance in 2001 but the industry was reluctant to offer terrorism coverage after the Sept. 11 attacks. The IOC had no coverage for the 2002 Winter Games in Salt Lake City.

Carrion said the IOC also considered two other options -- taking out a credit line to absorb the bulk of the risk, and a combined insurance-credit arrangement for both Athens and Beijing. The executive board decided in February to go with the standard contingency insurance.

Carrion said the IOC negotiated the bulk of the coverage before the March 11 terror bombings in Madrid that killed 191 people.

"We were fortunate we had found capacity before the Madrid incident, that was very helpful," he said. "After the Madrid bombings, capacity become even more strained, and we would have felt it in the price."

Rogge said security has long been the IOC's "No. 1 priority" and that Greece has done "everything humanly possible" to safeguard the games.

"This is an unprecedented effort," he said. "More cannot be done. Nobody can guarantee 100 percent security, but we can guarantee that we've done everything that was available and possible."

Aside from terrorism, insurance experts say the main risk in Athens would be from earthquakes. Athens sits on a fault line. In 1999, a quake in the Athens area killed 143 people, injured about 2,000 and left thousands more homeless.

Rogge said he and Denis Oswald, the IOC's overseer of Athens preparations, are confident Greece will be ready -- "but at the last moment."

"They could have had a more easy ride, but what counts is the readiness on the eve of the 13th of August," he said. "I think they will get there in the end."

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