Private donations would fund the Olympic bid committee’s purchase of insurance policies designed to guard against overruns and unanticipated costs, Pat Ryan, chairman of Chicago 2016 and an insurance magnate himself, told aldermen Tuesday.
The group expects to raise between $24 million and $41 million for a series of policies. Insurance for the Games was first broached this summer after Mayor Daley committed to signing the standard Olympic host city contract.
The document requires unlimited financial liability from the city for an Olympics here seven years down the road. Chicago 2016 representatives insist, however, that their plan, budget and the promised insurance would protect taxpayers.
Should Chicago win the bid, on Oct. 3, the Olympic committee would immediately purchase $500 million worth of public liability policies from multiple insurance firms to insure the host city contract, Ryan said.
Firms listed at the Committee on Finance hearing Tuesday included Swiss Re, Ironshore and XL, more than a dozen in all.
The public liability policies comprise the largest chunk of some $1.4 billion in coverage the Olympic organizing committee would purchase for the Games’ operating budget, Ryan said.
Other policies insuring various aspects of a Chicago Games’ operating budget would be bought over the next seven years, including a $475 million event cancellation policy purchased after the 2010 Vancouver Games ends and “all-risk excess clash” insurance worth $500 million.
The latter – an excess coverage policy – would go into affect in 2016 when the risks associated with an Olympics in Chicago peak, Ryan said.
Insurance bought for venue construction and the Olympic Village would be in place, including a $250 million “capital replacement” policy to insure the developers chosen to build the village – or the financial institution backing them – in case they failed.
The Civic Federation issued a report last week that called the bid committee’s budget and finances reasonable. But the Olympic Village remains risky, according to the report.