Los Angeles is requiring the organizers of the 2028 Summer Olympics to secure a $650 million insurance policy to cover potential financial losses if the event is canceled due to unforeseen circumstances like natural disasters or health emergencies. This practice has been common since the 2001 terrorist attacks. Following the costly postponement of the 2020 Tokyo Olympics, which faced significant financial losses, city officials assert that adequate insurance is crucial for risk management.
Discussions about event cancellation insurance have already begun, particularly for a venue in San Fernando Valley set to host several competitions. City Administrative Officer Matt Szabo noted that similar insurance has been secured by most Olympic organizing committees since the Athens 2004 Games, with limits ranging from $170 million to $1 billion.
While LA28, the organizing committee, acknowledged ongoing discussions about insurance, they have faced scrutiny from City Council members regarding their financial disclosures, especially for contracts of over $1 million. There have been calls for greater transparency, particularly in light of potential conflicts between the city and LA28. LA28, maintaining that they have shared necessary information, has not publicly listed larger contracts as required.
The tension around financial reporting and insurance needs has raised concerns about the relationship between LA28 and the city. City officials are eager to ensure that any changes to insurance requirements do not unduly burden the event’s financial viability. The next steps include LA28’s formal response to demands for more comprehensive contract disclosures.
