THE ROLE OF THE LAWYERS IN SPORTS INSURANCE POLICIES PART 6 - PICKNSTAKE.COM

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Friday, 16 November 2018

THE ROLE OF THE LAWYERS IN SPORTS INSURANCE POLICIES PART 6

Authored by: Joshua Charalambous, Steven Aitken

Failure to broadcast

Despite the plethora of technology available to us, the possibility of the failure of equipment resulting in interrupted or failed broadcasts remains a risk. With the exponential explosion of revenue associated with sports broadcasting, the loss that might be sustained for refunding advertisers and other marketing/ sponsorship companies could be significant. Sometimes, failure to broadcast is available as an extension of event cancellation/ interruption policies.



Prize indemnity/ contract bonus

Sean Cottrell has authored this piece on 'insuring against the concept of success' in which he interviewed Saul Paine of Hedgehog Risk Solutions. It explores the background and benefits of bonus insurance schemes. Professional sporting contracts often have mechanisms in place for high achievements. A very topical example is Leicester City's triumph in the Premier League this year. The club is reportedly set to receive c. £93m in prize money for winning the league.



Together with Champions League revenue and a likely increase in sponsorship, the success will make nice reading for the champions' balance books. That said, will they have expected Jamie Vardy to be called up to the England squad last season triggering a bonus clause in his contract? What about a bonus for Claudio Ranieri for masterminding the success, or the team bonus for winning the competition? Reputedly, a bonus was included in Ranieri's contract with the club conceding the clause in a commercial negotiation given its low risk eventuality!8



After the Portsmouth FA Cup debacle of 2010, where the club did not field certain players as it could not afford to trigger bonus payments, many more clubs are obtaining insurance against paying out contractual bonuses, although one would imagine that Leicester City's premium may increase after this year!

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