Vague war clauses cloud IPL cover

MUMBAI: The suspension of IPL - India's most heavily insured sporting event - has brought renewed scrutiny to the utility and limits of event insurance amid geopolitical tensions.

Howden, the insurance broker to the BCCI, acknowledged the suspension and said it would wait for an official decision on cancellation or rescheduling. "Match cancellations are complex and dynamic, and speculating is not in the best interest," the firm said.

IPL 2025 already saw a sharp rise in premiums following Rs 50 crore in weather-related claims last season. Reinsurance support dwindled, with just 20-30% of structured risks being transferred. The recent JioStar merger reshaped demand patterns, prompting broadcasters to reduce their coverage. While policies typically cover cancellation, adverse weather, unrest, and injuries, they are triggered only by outright cancellation or abandonment, not temporary suspensions - leaving policyholders exposed to short term halts.

"For a claim to be triggered, the event should either get cancelled or abandoned. Currently, IPL has been suspended for a week owing to the current situation at the border. The organiser can always commence the event at a later stage once things normalise. A similar situation happened during Covid 2021, wherein IPL was suspended, and after a few months, it commenced and successfully concluded," said Amit Agarwal, CEO of Howden Broking.

The pressing question is whether insurers may treat the disruption as a war event. Most policies, except marine cargo, exclude war-related risks as they fall under force majeure - events deemed uninsurable. If applied, even routine claims, such as for travel cancellations, could be denied. Besides IPL, corporates are delaying product launches and conferences as international guests are avoiding them due to advisories.

"Event cancellations in the current scenario should be treated as insured events until declared otherwise. Coverage can be broad on paper, including cancellations and suspensions," said Anup Dhingra, MD, FINPRO, IMEA. Rushik Patel of Edme Insurance Brokers said the key complication lies in the vagueness of war clauses.

Stay informed with the latest business news, updates on bank holidays and public holidays.

AI Masterclass for Students. Upskill Young Ones Today!– Join Now