Insurance brokerage DeWitt Stern has come up with a way for businesses looking for a big payday from the 2014 Super Bowl to protect expected revenues.

New York-based DeWitt Stern has designed a special, broad business interruption policy to cover businesses relying on the Super Bowl, held for the first time in an open-air venue—MetLife Stadium in East Rutherford, N.J.—early next year.

LeConte Moore, now managing director at DeWitt Stern, was with Marsh in 2001 when the 9/11 terrorist attacks postponed the Super Bowl. Marsh was on the risk for the National Football League.

But this year—after a temporary blackout at the Super Bowl, the cancellation of the New York Marathon due to Superstorm Sandy, and the terrorist bombing during the Boston Marathon (combined with the obvious weather risk of playing the biggest game of the NFL's season outside in New York in February)—Moore says he began thinking about insurance solutions for the various businesses looking forward to raking in the millions of dollars to made from the event.

“I know the NFL has insurance for these risks, but what about the businesses—all the restaurants, caterers, bars, hotels, retailers and limousine services?” Moore says he asked himself.

DeWitt Stern quickly found a partner in HCC Insurance Holdings' Houston Casualty Co.

“They were very interested, but there were some challenges,” Moore says.

A contingency, or cancellation, insurance policy is typically dependent upon a policyholder proving a revenue track record.

“But there is no track record for this,” Moore explains. “The Super Bowl has never been in New York. So we got really creative and designed an agreed-upon amount policy.”

Just a specialty insurer might do with fine art or a classic automobile, insureds and the insurer will agree on a predicted revenue value and should the policy be triggered, “There is no loss adjustment,” Moore says. “Basically we just send a check.”

The policy is triggered if the Super Bowl is canceled or moved for any reason, whereas most business interruption policies are triggered by physical damage. It is active from the time the premium is paid until kickoff on Feb. 2, 2014.

DeWitt Stern is the exclusive provider of HCC but other brokers can access the coverage through DeWitt.

The product is not aligned with the NFL in any way but it is interesting to note it does come as some industry observers predicted the Boston Marathon bombings would affect the cancellation insurance market.

Moore says HCC is experienced with this type of risk, and was actually on the underwriting of the Boston Marathon. He says he was initially concerned HCC would change its offering following the April 15 bombing but they did not.

However, HCC does have the right to change rates on this product, Moore explains. Buyers of the policy will lock in rates but if a terrorist attack would occur before the Super Bowl, those looking to buy the coverage might face higher rates for it, Moore says.

Special Reports /

DeWitt Stern Designs Super Bowl-Related Cancellation Policy for NY Metro Area

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