From the Field to the Fans: Insuring Mega Sports Events

Canada is increasingly taking centre stage as the host or co-host to major international sporting tournaments, bringing together thousands of athletes, coaches, officials, volunteers, fans and spectators from around the world.

This is an opportunity to affirm the country's status as a premier destination for hosting events of global cultural significance. Putting on such events also means carrying great responsibilities with precision and expertise.

Organizers will need to ensure the safety and security of participants and spectators while meeting the global organizing bodies' requirements, obtaining the necessary sports event insurance and complying with Canada's regulatory frameworks.

Mega sporting events are enormously popular and draw large crowds. The ambition of governing bodies for bigger, better and more globally visible events raises the commercial stakes for organizers. Multiple stakeholders are involved, and major infrastructure investments are often required.

Given the complex logistics involved, it's prudent to prepare for the unexpected. So, for the organizers of such events — and their governments and host cities — one of the primary challenges is ensuring the appropriate insurance is in place. To secure appropriate event liability coverage, a more detailed examination of the risk factors is required.

Key liability risks for mega sports events

It might be tempting to think the risk profile of sports events is relatively straightforward: it's all about proper crowd control. However, as important as that is, the organizers of large events in particular face a much more complicated series of overlapping risks, ranging from liquor liabilities to cyberattacks.

Public safety and crowd management risks

Public safety and effective crowd management are clearly among the organizers' prime responsibilities. With large numbers of attendees, the risk of injury to spectators, participants and staff is significant.

Spectators face hazards ranging from slips, trips and falls on poorly maintained surfaces to crowd surges that can lead to crush injuries. Attendees can also be injured by flying objects, such as balls or beverage cans.

Liquor liability risks

Alcohol consumption is a major risk factor at major sports events in Canada because of its potential to cause serious incidents. To help minimize this, standardized alcohol service training programs, such as the AGCO-approved Smart Serve, should be mandated and documented.

Additionally, there are strict rules to regulate alcohol consumption at sports venues across Canada:

• Attendees drinking alcohol on premises meet the province's legal drinking age.
• Valid ID proof is required, especially for those appearing under 25-30 years old.
• Bringing outside alcohol into the venue is prohibited.
• Alcohol can be purchased from licensed vendors only within the venue.
• A maximum of two drinks per person per purchase or possession is typically allowed.
• Alcohol sales usually stop before the event concludes.
• Staff can refuse service or remove visibly intoxicated attendees.
• Some venues offer family-friendly or alcohol-free seating areas.
• Cannabis consumption is prohibited inside venues, even where legal.
• Stadium or arena policies may impose stricter rules than provincial laws.

Even with these rules in place, alcohol-related liabilities can extend beyond the event premises and continue after the match concludes. Event organizers can be sued if inebriated attendees cause property damage or road traffic accidents, especially if the individual was served past the point of intoxication. This is commonly known as host liquor liability.

"Organizers cannot completely contract their way out of host liquor liability," says Stephen Bortolon, national practice leader, Media and Entertainment at Gallagher.

"If an incident occurs, they will still be named — and their reputation will still be on the line. For large-scale events, the only responsible approach is comprehensive liquor and sports event liability coverage across all layers. This ensures claims don't pierce primary limits and cascade into excess policies."

Risks to athletes

For athletes, the risks are particularly significant, especially in contact sports and extreme weather conditions. There can be serious injuries from heat exhaustion, or catastrophic injuries may occur. This can rebound upon event organizers.

Organizers could face legal action and steep medical bills if, for example, an elite athlete is injured and the cause is found to be their negligence. Organizers can explore comprehensive medical coverage to address these potential liabilities.

Volunteering workforce risks

Sport events rely heavily on volunteers at every point to operate successfully. Voluntary roles are varied, and some are high-risk and public-facing, such as working with children or the elderly, managing large crowds, handling cash or sensitive equipment.

Event organizers are liable for addressing risks pertaining to volunteers, including potential injuries, misconduct or inadequate training provided to them (which can potentially impact event safety overall). This makes it imperative to screen, vet and train volunteers properly. For higher-risk roles, background checks and training are more important, given the associated risks and liabilities.

To learn more about the risks volunteers pose to sporting organizations, read our article Aligning Sports Events Insurance Coverage for Volunteer Staffing Risks.

Extreme weather and environmental risks

Rising temperatures and air pollution are emerging as significant concerns for sports event attendees. Prolonged exposure to such conditions can cause medical emergencies, including heat stroke, dehydration and respiratory issues.

Unusually warm weather has also been linked to performance challenges and safety hazards for athletes. Heat stress can impair physical performance, while poor air quality may exacerbate respiratory conditions. Additionally, extreme weather conditions have been associated with accidents and crashes during events, increasing the risk of injuries.

"Long-term climate unpredictability makes planning for sports events tricky and raises liability concerns for environmental damage," notes Bortolon. "Organizers can tackle this with sustainable climate adaptation strategies for future events."

Security and cyber risks

Protecting international sporting events against security threats is important, particularly in today's geopolitical climate. Large gatherings are potent targets for civil unrest, politically motivated attacks, petty crime and fan violence.

Security teams must enforce robust policies on the use of force and removing disruptive individuals during crowd control. Organizers must also maintain sufficient event liability insurance to mitigate the risk.

Venue infrastructure risks

As mega sports events witness near-capacity crowds, venue infrastructure can come under significant stress, potentially exposing structural faults or weaknesses. For example, barricades may collapse, seats or stands may break, or the floor and washrooms may be poorly maintained, all of which can lead to accidents. Adding to the complexity for organizers, each of these elements may be managed by different contractors.

This is why event organizers need to ensure that their insurance policy includes coverage for contractual liability. Such coverage ensures that liability can be assigned to the responsible contractor if damages result from their negligence. This protects the organizer from financial exposure. Additionally, organizers should require contractors to carry their own liability insurance.

Event cancellation and financial risks

Perhaps the most disruptive risk comes from the cancellation or postponement of any event or match fixture. Causes can range from extreme weather to security threats. Such factors are increasingly disrupting sports events, as seen during the 2023 Canadian wildfires, leading to cancellations or scaled-back events and consequently revenue losses.¹

Another major financial risk arises from contractual liability. The primary organizer hosting events must manage and oversee multiple contracts, including those for the venue, third-party alcohol services and security contractors. If any of these contracts are breached or services are not delivered, the organizer may face financial losses. Having a relevant contractual liability clause added in the event insurance policy can ensure liability is transferred to the contracted entities.

Safeguarding experiences: Optimizing a sports event policy

Organizing professional sports tournaments has become a high-stakes undertaking in recent decades. As the events grow in scale and complexity, any lapses can result in significant financial or legal penalties.

Mega sports events require multiple insurance coverages to protect all parties against the various hazards. At the same time, some risks can be mitigated adequately without insurance. Finding the right balance between the two is key — as is negotiating premium levels and any risks specifically excluded from policies.

"After all, what's the point of an insurance policy if critical exclusions lead to greater costs later from a single claim?," points out Bortolon.

For organizers, it is important to find an insurance broker they trust — one with knowledge of the unique demands of the sports industry. Partnering with a specialized broker with tailored advice can help protect against unforeseen risks.

Game on: Comprehensive sports event insurance

Gallagher brings decades of rich, first-hand experience in insuring provincial and national sporting organizations, offering deep insights into the risks associated with hosting and operating such events in Canada. Our strategic risk management and tailored insurance solutions come together to ensure events run smoothly, creating unforgettable experiences for fans and athletes alike.

Secure the right sports event insurance with Gallagher. Contact us for a well-optimized policy to support your success.