Insurance industry rides the IPL wave

At least Rs 2,000 crores have been spent to avoid any loss that might occur out of cancellation or truncation of matches

Even before a ball has been bowled, the Indian Premier League (IPL) has once again stamped its mark as the biggest sporting extravaganza in the country, at least in terms of insurance cover.

The BCCI has purchased an insurance coverage of around Rs 1,200 crore this season, which will make up for the loss of revenues from sale of broadcast and other rights if any of the IPL matches fail to take off. The cover includes weather impediment, strikes and holidays declared in case of unforeseeable incidents like terrorist attack.

The board has finalised the policy for the tournament, which begins tomorrow and ends on 24th May. All matches will have insurance covers of almost equivalent amounts. A total of 60 matches including the final will be played between eight teams and each match has been insured for around Rs 20 crore against cancellation.

"The BCCI has asked for a policy of Rs 1,200 crore," said an insurance executive. According to him, the fact that the IPL is being held in India has increased the coverage for this year's edition. "Half of the tournament was held in UAE last year, so it witnessed a shrink in coverage, this is not the case this year, hence the board has been able to get a higher cover amount," the executive said.

Not only the cricket board, but broadcasters and franchisees have rushed into buying insurance cover against event cancellation and accidents.

Multi Screen Media (MSM), which has the official broadcasting rights of the tournament, has bought an insurance coverage of around Rs 800 crore. "The broadcaster has taken a policy on gradation basis where the coverage is calculated based on loss of revenue from advertisement if a game is called off after 10 or 20 overs, or the number of overs is reduced," said K K Rao , GM at Oriental Insurance. The state-owned insurance company is providing cover for Mumbai Indians while talks are in the final stages for Rajasthan Royals. Kolkata-based National Insurance Company is providing cover to four franchisees.

Rajasthan Royals mentor Rahul Dravid with Shane Watson and Ajinkya Rahane during a press conference in Mumbai

Team managements are buying multiple cover for their players against injury, medical insurance, and baggage insurance. Like the previous season, this year too Yuvraj Singh has obtained the highest insurance cover of Rs 65 crore. According to Rao, IPL is considered a safe property and hence most of the policies are on the basis of probable-maximum-loss basis where the chance of complete loss of revenue is very less.