AFCON stakeholders urged to tie up contractual loose ends before tournament commences

Nearly two years after South Africa successfully staged the 2010 FIFA World Cup, the country is now preparing to host the 2013 Africa Cup of Nations (AFCON). In order to accomplish the same level of success, all stakeholders of the event are urged to ensu

This is according to George Jennings, Senior Manager: Underwriting (Engineering) at Lion of Africa Insurance, who says this means ensuring that all risks are insured and that all contractual agreements are in place prior to the event. He says this is crucial for all stakeholders who wish to avoid potentially devastating financial and legal liabilities in the wake of an unpredicted crisis.

Lion of Africa Insurance was the Lead Insurer on the majority of stadiums during the 2010 FIFA World Cup and Jennings says there are a host of issues that come into play when insuring a stadium during a globally watched sports tournament. “The tournament itself has significant financial risks which should be insured against. What is crucial to note is that many different parties are involved and it is important that all parties know where their own liability begins and ends.”

He says there have been many instances at stadiums that have enforced insurers into complex liability situations. He refers to the Ellis park (Coca Cola) stampede in 2001 which left 43 dead and the recent riots and fire outbreak at the soccer stadium in Cairo, Egypt. “From an AFCON perspective, there was also the terrible incident of a terrorist attack on the Togo team bus during the 2010 tournament in Angola, which left three people dead.”

“Each incident amounted to millions of Rands in highly complex liability claims. This highlights the need for the stadium owners, event organisers, independent sponsors and other vendors to have all liability documents in check so that an already tragic situation is not made worse by liability wars.

According to Jennings, different parties could be held liable for different claims. “For example, if a stadium is damaged due to bad weather such as storms, lightning or flooding before the event takes place, the local authorities who own the stadiums could be left exposed and held liable. Furthermore, should bad weather conditions prevent an event from going ahead at a stadium, it could fall to the sponsors and event organisers to take out Inclement Weather Cover, which would cover their costs in this instance.”

According to Jennings, any form of a liability claim that arises at an event such as AFCON could involve levels of recourse for different parties. “For instance, if patrons contract food poisoning or are injured at a restaurant or food stall within the stadium, then the restaurant or food stall could be held legally liable. However, he stresses that such a claim would only be paid if the policy makes provision for products / food poisoning liability. In addition to this, Jennings emphasizes the adequacy of Liability Limits of Indemnity during such an event.

“The bottom line is that once a loss has occurred it is too late to reverse the situation, or check legal contracts and policy documents. This is why it is crucial to check that policy wordings provide adequate indemnity, and wherever possible, legal recourse (subrogation) clauses are contracted.

He explains that in terms of indemnity for the stadium structures, the onus is on local authorities to ensure stadiums are structurally sound before an event. “It is also their responsibility to undertake a full risk assessment of the stadium. “Insurance brokers and intermediaries play a key advisory role in the risk assessment process as it is in the best interest of the Insurer to have as much information as possible about the potential risks and exposures.”

Moreover, Jennings urges stakeholders to consider specialised Events Liability cover options that are available for these types of large-scale events such as Public Liability Insurance which covers events that host a large amount of people and Non-Appearance Indemnity, which can indemnify event organisers and sponsors for the costs of an unforeseen cancellation of an event.