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COVID-19 out of coverage area for insurance; IPL franchises brace for losses

With coronavirus causing panic across the world, insurance companies have decided to exclude that from the list of reasons they entertain claims for.

Published: 13th March 2020 11:57 PM  |   Last Updated: 14th March 2020 12:56 AM   |  A+A-

Indian cricket team

Indian cricket team (Photo | Twitter/BCCI)

Express News Service

CHENNAI: The Uttar Pradesh Cricket Association heard at around 5 pm on Friday that the India-South Africa ODI that was going to stage in Lucknow on March 15 has been postponed, along with the third match in Kolkata. A little later, the association came to know they will not be reimbursed by insurance companies as there is no coverage for eventualities caused by coronavirus. 

Most international cricket matches in India and all IPL games are covered by insurance. The plan varies from centre to centre and on an average, the sum assured for the organisers is between Rs 5 crore to Rs 8 crore, if a match doesn't take place at all.

Even if one ball is bowled, it counts as a match taking place and the organisers would not receive any money.

Normally, this comes into play after washouts, like the first ODI against Dharamsala on Thursday.

With coronavirus causing panic across the world, insurance companies have decided to exclude that from the list of reasons they entertain claims for.

"All major insurance companies decided about 15 days ago that there will be no coverage for coronavirus-related reasons. So organisers of cricket matches that don't take place due to coronavirus will not receive anything as insurance under the event cancellation policy," said Abizar Bohra, head of Sports and Entertainment, Global Insurance Brokers Pvt Ltd. This company handles the insurance of IPL and other cricket matches in India in multiple cities.

For bilateral matches involving India and other teams, the responsibility lies with the staging state association to insure the fixture under the Special Contingency Policy.

For IPL games, this is done by the franchises. Usually, each franchise buys a policy that covers the seven games it hosts every season. The premium varies from Rs 1.5 to Rs 2 crore for seven games. The sum assured if one match is cancelled due to acceptable reasons is generally around Rs 6 crore.

Other than rescheduling that has to be done following the BCCI's announcement that the IPL has been suspended until April 15, the franchises have a new headache - they have to see if the existing insurance policies are still valid under the changed circumstances. Plus, there will be no fresh insurance offering compensation for disruptions caused by coronavirus.

While a BCCI official said things may have to be worked out afresh, IPL franchises appear to be unsure about the insurance. "We have to check with the insurance company about the compensation part. We have paid the premium and if matches are cancelled or rescheduled, which is the case now, we have to find out what the provisions are," said a franchise official.

Most franchises usually get the insurance done 15 days prior to the first match and start selling tickets after that. Considering that the IPL was scheduled to start on March 29, many of them had gone ahead with it.

For matches that are postponed, the insurance companies are expected to discuss with the franchises how or whether to renew the policies.
 



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