World Series Throws Risk Managers a Curve

The Fall Classic has its own unique set of risks. In the 2008 series, rain paused a game in the sixth inning. In 1989, an earthquake caused a 10-day delay.

By JONATHAN BERR, who has written for national media outlets for more than 15 years.

For risk managers, the World Series is not just a game.

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Major League Baseball's best-of-seven championship series is one of the world's premiere sporting events, attracting a television audience of tens of millions in the United States and around the world. It also will ratchet up the pressure on insurers to make sure that anything that conceivably might go wrong won't occur.

There are countless details to consider. For one thing, like in any major event, there are scads of subcontractors responsible for everything from making sure that hungry fans have enough hot dogs to eat to ensuring that the equipment used to broadcast the series to the four corners of the globe is in working order.

Making sure that everything gets done correctly is a big job. For Brian Kingman of brokerage Arthur J. Gallagher in Glendale, Calif., that means one thing: binders filled with agreements. "There are many subcontractors involved in these events," he said. "We review every indemnification\agreement (ahead of time)," he said. "We understand every insurance requirement."

Unlike the Super Bowl held annually in one stadium, the World Series is held in two cities, the location of which is only known a few days ahead of time. That means planning must start at the beginning of the post-season in early October. The Texas Rangers and the St. Louis Cardinals this year will vie for baseball's world championship starting on Wednesday.

Foremost on the minds of Major League Baseball's risk managers is security, said Chris Rogers, director of risk control for Aon's National Entertainment Group. These concerns range from keeping celebrities and other VIPs safe, to monitoring the remote possibility that terrorists would try and disrupt the marquee event for America's pastime.

Rogers said security experts tend to "prepare for the worst," and then work their way backward. Sudden weather events such as a tornado, for example, may hinder proper evacuation.

"Where and how are we going to move these people to safe areas (inside the stadiums)?" he said. "Who is going to make that call? There is a lot of coordination to make sure that people are on the same page."

Weather was an issue in the 2008 World Series when, for the first time in postseason history, Game 5 was suspended because of rain. In 1989, just 30 minutes before Game 3 of the World Series between the Oakland Athletics and the San Francisco Giants, a 7.1 magnitude earthquake hit the area, collapsing the Bay Bridge and killing 63. Although nobody was hurt inside the ballpark, the series was postponed for 10 days.

The game resumed two days later. Baseball league officials, however, don't insure the playoffs against inclement weather, a league spokeswoman told Risk & Insurance® in an email.

Given the amount of money at stake during the series, baseball may have purchased contingency insurance in the unlikely event that a game is cancelled, Kingman said.

He also said that contingency rates "are firming up a little bit."

October 18, 2011

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