Boston Olympics backers say $2 billion insurance plan would protect taxpayers

Reuters News
Posted: Jul 23, 2015 2:32 PM

By Scott Malone

BOSTON (Reuters) - Backers of Boston's controversial bid to host the 2024 Olympic Games on Wednesday said they would carry some $2.3 billion in insurance for event, an effort to assuage worries that city taxpayers could be left footing the bill.

The Boston 2024 bid committee said it would line up a series of insurance policies that would cover the costs ranging from a terror attack, the injury of spectators or the outright cancellation of the Summer Games, if Boston's bid was approved by the International Olympic Committee.

The projected cost of hosting, more than $8.6 billion including operating and construction costs, has been one of the concerns most cited in public opinion polls showing that many in and around the city oppose the bid.

Just 42 percent of Boston-area respondents to a WBUR/Mass Inc poll published earlier this month said they supported the idea of holding the games there, with half the respondents saying they opposed the idea. Three out of four respondents said they worried taxpayer funds would be required to stage the event.

The Boston 2024 group and the city's mayor, Marty Walsh, have repeatedly said the event can be funded privately, through sponsorships, ticket sales and television rights. Backers said they designed a less costly version following the record-setting 2014 Winter Games in Sochi, on which Russia spent some $50 billion.

"Between insurance and the other safeguards we have put in place, we have set a new standard for protecting the best interests of taxpayers and ensuring that the Games operate entirely with private financing," said Steve Pagliuca, a private equity executive who serves as chairman of Boston 2024. "Boston will have the most insured Games in Olympic history."

The No Boston Olympics group, which sprung up early this year to lobby against the bid, argued the proposed insurance policies would not cover cost overruns, which are common in large-scale events like the Olympics.

"The boosters admit they will not cover cost underestimates and scope changes," the group said. "Not coincidentally, these have been the main drivers of overruns for previous Olympic host cities."

The organizers noted that none of the proposed insurance policies, estimated to cost $128 million, would be purchased until Boston was picked as a host city by the IOC.

Boston would face a lineup of world capitals bidding to host the 2024 games, including Rome, Paris, Hamburg and Budapest.

(Reporting by Scott Malone; Editing by Lisa Lambert)