Insurance blow for IPL teams
The Covid-19 outbreak has caught an expected entity on the wrong foot. Envy of the rest of the sports world for the riches it offers, the Indian Premier League (IPL) will not get a penny from insurance for cancellations. In contrast, the organisers of the Tokyo Olympics will receive an estimated $250 million as the mega event is not happening this year. Reports claim organisers of Wimbledon will get $141 million for the postponement caused by the pandemic. In IPL, however, this is not applicable because the franchises who insure these matches were late in securing the policies.
By the time they woke up, Covid-19 had become a global problem and insurance companies had stopped offering cover for disruptions caused by the virus. It is an unlikely mistake in a set-up that puts a premium on maximising profit. Other than advertisers, who consider it a grand occasion to exhibit their products, the IPL is by and large a money-making exercise for almost everybody else. Overlooking an aspect as basic as insurance was not expected from the franchises, who pay between `1.5 crore to `2.5 crore in total for the seven matches each of them host per season.
But they leave it for late and get the insurance done just weeks before the IPL starts. This proved costly this year. Big events like the Olympics, Wimbledon and British Open golf get this done months in advance. Regretting the losses they will incur for matches not taking place, the IPL franchises have admitted this is something they had not foreseen. Insurance professionals were also of the opinion that this should serve as a lesson and in future, team owners should buy insurance cover well in advance. What nobody is admitting, however, is how careless about this important part the IPL and the franchises were. Insurance is one of the prerequisites of any sporting event of some stature. Not just losses for organisers, they offer accident cover to spectators as well. By not paying adequate attention to such a crucial area, the IPL franchises have shown they are still to mature into responsible entities, driven not just by profit.