Wimbledon Just Served An Ace With Pandemic Insurance BCCI Could Not Possibly Comprehend Any Such Situation -Siddharth Batra

Wimbledon has been cancelled as other premier sporting events in the world. It is the second time that it got cancelled after World War II. Insurance is ringing major corporates, sporting bodies all around the world to cover the losses due to business interruptions and cancellations. Everyone wants to catch the same flight, but it’s too late in this case. Not every sports business is in the same boat. Organisations unhesitatingly want to rely upon what’s known as a ‘force majeure’, which in French means ‘superior force’ but it’s too late in the day.

Such a clause covers businesses and organisations in the event of unexpected acts of God or nature.

In my opinion, in such case, not everyone would benefit from it. Such clauses are heavily negotiated by organisations because of the considerable risk that they are exposed to, and such a clause covering a pandemic are rarely included in the contract as such a pandemic has happened first time after 1918 that was the Spanish flu and what are covered are “fire, floods, hurricanes and snowstorms. Wimbledon had foreseen the possibility of such an extraordinary circumstance after SARS 2002 and it started paying an extra premium to cover the same post 2002 which costed them.

Wimbledon paid $ 2 million every year for 17 years totalling to $ 34 million, not it is all set to receive a compensation of $ 141 million.

IPL has been cancelled this year, BCCI could neither contemplate any such event nor could the corporates. You do not have it today, and tomorrow looks out of the question in this case. There are force majeure clauses in most of the contracts but not detailed to cover a risk that we see today.

Actually, you do not want the force majeure to apply everywhere, in a considerable relief the Life Insurance Council has clarified that ‘Force Majeure’ will not apply in case of COVID-19 death claims. Life insurance council said in a statement that “We reiterate that all life insurance companies stand by their customers in these difficult times and the customer should not be swayed by misinformation or misrepresentation. Such a clause would have meant keeping the policy in abeyance by applying force majeure. 

Now, the question what holds for future, will the corporates, sporting bodies will be able to negotiate any such clause in the near future?  I am sure not for the next half a decade unless they are ready for a steep negotiation because reports are that reassurance of Covid 19 cannot be ruled out.

Conclusion – Does insurance policy cover such a risk as to the present one? The answer is ‘No’ unless such a specific clause is detailed out covering a Pandemic. Wimbledon served an ace.

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