The 2018 Winter Olympics bring in the usual risksassociated with international sporting events.

Avisitor poses for a photograph next to the 2018 Pyeongchang WinterOlympic Games mascot, Soohorang, in front of Gangneung Station inGangneung, Gangwon Province, South Korea (Photographer: SeongJoonCho/Bloomberg)

But this year, the location and political climate of the event'shost country adds some risks to which insurers are not necessarilyaccustomed.

There are, of course, the usual risks for the Olympic Games suchas event cancellation, exposure, abandonment, and terrorism. (Therisk of a terrorist attack becomes higher with each OlympicGames.)

Related: Summer Olympic Games put spotlight on Rio'senvironmental risks

The internet's vast unknowns

Cyber insurance deals with some uncharted territory, includingclashes between different lines of business, coverage of contingentbusiness interruption, outages of external networks and internet,and security gaps.

This year, the need for cyber insurance surfaced quickly, firstthrough unabashedRussian hacker interferences as retaliation for thatcountry's doping ban, and then with the "Olympic Destroyer"malware, which aimed to shut down Feb. 9, 2018, opening ceremony ofthe Pyeongchang Olympics. It follows that the International OlympicCommittee has taken out protection for around $800 million for theOlympic Games, covering the majority of the roughly $1 billioninvestment that the IOC made in the host city, accordingto Reuters.

Myriad other risks

What follows is a breakdown of the types of insurance necessaryto run successful Winter Olympic Games.

There are monumental risks accompanying the major taskof construction and infrastructuredevelopment of the Olympic arena. Constructioninsurance is purchased in order to guarantee the financing andcompletion of athletic and non-athletic venues. Constructioninsurance also is necessary as almost 3,000 Olympians will becompeting in 15 different winter sports, all of which requirespecific facilities including the Alpensia Biathlon Centre, theOlympic Sliding Centre, the Phoenix Snow Park, the Jeongseon AlpineCenter, and specific arenas for hockey, curling and iceskating.

Related: Insurance protection for sportsstadiums

Also, it is necessary to build several non-athletic venuesincluding the Olympic Village, the Olympic Stadium and areas forthe press and international broadcasting. While the insurancenecessary for the construction of all of these sites can differ,it's safe to assume that the coverage is costly.

Liability coverage, specialty policies and more

Private Developer insurance includes surety and performancebonds, liability insurance, builders' risk insurance, and bidbonds. These types of policies protect from the various "what if"scenarios, from overspending on the build itself, to thedestruction of people or property during the construction of theOlympic Games Arena.

Such "what if" scenarios become more pressing duringconstruction of a site such as the Olympic Arena, which was on avery strict timeline. When construction projects are rushed, thereis an increased probability that mistakes and injuries willhappen.

This year's Olympic Stadium holds 35,000 people, so aconstruction mistake could lead to monumental bodily injury claimson top of property damage. If there's anything wrong withthe ice, for instance, and an Olympian catches an uneven edge whilepracticing or performing a choreographed routine, the athlete couldsustain a career-ending injury. Such a devastating incident causeduneven ice could spur a major lawsuit, making claims from such aninjury potentially monumental.

Related: 5 keys to 'insuring' a safer 2018

What about the actual athletes?

During the Games, the Olympians themselves are often covered byinsurance policies. Olympians need to train daily, often pushingtheir bodies to the limit, and they need assurance that any damagethey are doing to their bodies on behalf of their country, iscovered.

Olympians who are members of Team USA receive full healthinsurance coverage during the Olympic Games, compliments of theU.S. Olympic Committee. (Here's hoping Austrian snowboarder MarkusSchairer receives equally solid medical insurance during the Games,in light of an injury he sustained during a quarterfinalscompetition in which he broke his neck.)

Related: 20 wealthiest U.S. Olympic athletes inRio

Since acts of terrorism or war are generally excluded fromproperty and casualty insurance policies, political risk insurance, which covers disruptionfrom terrorism or war, is offered as a standalone policy, or anadd-on to property insurance. A political risk policy also willgenerally cover accident and health risks.

At these Olympic Games, the risk of terrorism or war is higherthan usual as two of the participating countries, North Korea andthe United States, have recently exchanged nuclear threats. What'smore, North Korea and South Korea are technically still at war.Both of the Koreas, though, have made an effort to use the Games toreconnect. Case in point: North and South marched together as aunit in the Parade of Nations, and participated jointly in women'sice hockey.

All that glitters

Olympic medal insurance is also necessary as historically,several American Olympians have misplaced or lost their medals, orthese singular trophies have been stolen.

For years, Liberty Mutual has insured each gold, silver andbronze medal won by U.S. athletes, noting how meaningful everymedal is to the country and the athlete who earned the right towear it. The company will continue to provide coverage for allmedals through 2020.

With medal insurance in place, an athlete will be able toreplace a lost or damaged medal at no additional cost.

Although no existing policy provides coverage for every aspectof the Olympic Games, piecing together insurance policies in thismanner is an effective way to ensure that there is adequatecoverage for the event, from start to finish.

Hannah Smith is a staff writerwith FC&SOnline, the recognized authority oninsurance coverage interpretation and analysis for the P&Cindustry. To reach this writer, send emailto [email protected].

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