In order to avoid the financial risk arising out of cancellation of matches, ESPN India has taken Rs 148 crore ($31.5 million) insurance from Oriental Insurance.
According to the insurance agreement, the broadcaster will cover revenue losses arising from the cancellation of event, a senior executive from Oriental Insurance said.
Every time any match is cancelled, ESPN India can raise a claim of Rs 5.9 crore (Rs 59 million) for 19 matches and a claim of Rs 6.53 crore (Rs 65 million) for another eight matches each.
"We do not comment on the financial numbers. ESPN India that has taken the insurance cover for the ICC T20 World Cup and we are covered for any kind of financial losses arising out of cancellation of a match due to bad weather among other reasons," says ESPN Software India managing director R C Venkateish the Indian arm of Singapore-based broadcaster ESPN STAR Sports.
ESPN had paid Rs $ 1.1 billion for broadcaster rights in 2006 for the telecast rights till 2015.
The Twenty20 event will kick off in the United Kingdom on 5 June. The matches will be broadcasted on Star Cricket. Oriental Insurance will cover all 27 matches. The public sector insurer has also covered the players of the Indian cricket team both male and female. The players are covered against personal accident and overseas mediclaim.
ESPN has already sold 95 per cent of airtime at 45 per cent premium at about Rs 325,000 for a 10-second on-air advertising spot over the inaugural ICC T20 World Cup that was won by the Indian team. ESPN India expects to rake in around Rs 225 crore (Rs 2.25 billion) from advertising revenue from the T20 World Cup.
Oriental has collected a premium of around Rs 15-18 lakh (Rs 1.5-1.8 million) for the policy from insuring the players. The premium rate for the policy was hiked by over 60 per cent after the IPL was shifted from India to South Africa due to security reasons after the attack on the Sri Lankan players in Lahore.
Board of Control for Cricket in India has taken personal accident cover for each player against plane hijacking, baggage loss and emergency hospitalisation.
The cricket board has raised the personal accident cover for all cricketers including men and women and the team officials from Rs 10 lakh (Rs 1 million) to Rs 2.5 crore (Rs 25 million). The board has taken Rs 250,000 overseas medi claim cover for all players. The policies will come into force in case of accidental injuries, partial and permanent disability and accidental death.
Sony entertainment television had taken Rs 400 crore (Rs 4 billion) insurance against ad revenue losses in IPL season 2.
Additional reporting by Asish Sinha in New Delhi
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