City Hall Pushes LA28 for More Insurance and Public Contract Details

Los Angeles city officials have asked organizers of the 2028 Summer Olympics to secure a $650 million insurance policy to protect against potential cancellation and agree to cover any losses above that amount. The request from City Administrative Officer Matt Szabo comes amidst growing concerns from City Hall regarding LA28’s financial transparency, particularly its reluctance to publicly disclose contracts.

Szabo, who advises the City Council and Mayor Karen Bass, formally requested the enhanced risk management protection in a letter to LA28's chief operating officer, John Harper, this week. This type of event cancellation insurance is designed to safeguard Olympic hosts should natural disasters, terrorist threats, health emergencies, or other unforeseen events disrupt the Games.

Historical precedent underlines the city's caution. Both World Wars I and II led to Olympic cancellations. More recently, the Tokyo 2020 Summer Olympics were postponed to 2021 due to the COVID-19 pandemic, resulting in an estimated $3 billion loss for organizers who severely limited spectator attendance. Tokyo had purchased a $650 million insurance policy. Szabo noted that such protection has been standard practice for most Olympics since the 2001 terrorist attack on the U.S. All but one Olympic organizing committee since the 2004 Athens Games has bought event cancellation coverage, with Athens securing $170 million, Beijing $300 million, London $400 million, and Rio de Janeiro $1 billion. Paris, host of the 2024 Olympics, is the sole exception, reportedly due to a substantial increase in insurance costs after Tokyo’s pandemic-driven losses.

While LA28 reportedly has some existing insurance for potential interruptions or cancellations, city analysts want the coverage increased to the requested $650 million or the maximum commercially reasonable limits available. Szabo’s office found that the market for major event insurance has recovered in recent years, pointing to the World Cup securing approximately $1 billion in coverage this summer. Szabo emphasized the need for a single, comprehensive risk management plan for “the Games in their entirety,” rather than piecemeal coverage for individual venues like the one in the San Fernando Valley planned for three-on-three basketball, skateboarding, and BMX cycling events.

This insurance request surfaces as a separate, but related, issue continues to simmer between City Hall and LA28: financial transparency. City Council members, including President Marqueece Harris-Dawson, Hugo Soto-Martinez, and Katy Yaroslavsky, have voiced strong concerns about LA28's failure to publicly disclose details of contracts worth $1 million or more in its recent annual reports. This lack of detail, they say, violates a 2021 contract between the city and LA28.

City Controller Kenneth Mejia also sent a letter in August, requesting more complete financial disclosures. Beyond contract details, Mejia asked for specific insurance coverage amounts, schedules and budgets for venue preparations, financial statements comparing forecasts to actual performance, bank statements for the required contingency fund, and more granular breakdowns of broad budget categories.

LA28 acknowledged the city had accepted its past annual reports without protest until recently. The organizing group stated it “continues to engage with the City pursuant to its obligations in the Games Agreement by sharing required insurance policies and engaging with City partners regarding those policies.” Regarding the contract disclosures, LA28 said it is “working through those requests now” and remains committed to its obligations, though it has previously shared such information in private meetings, not publicly.

Council President Harris-Dawson called the situation a “troubling picture,” suggesting it threatens the city’s relationship with Olympic organizers. He also raised concerns that LA28 has resisted awarding a share of its contracts to Los Angeles-based businesses, a requirement LA28 argues would restrict their options and drive up costs. Harris-Dawson warned that “in the absence of information people will come up with their own story.”

Under the 2021 Games Agreement, the city has the right to ask Olympic organizers to adjust their insurance coverage. Szabo’s letter specifies that LA28 must respond in writing within 30 days. City Administrative Officer Szabo and Chief Legislative Analyst Sharon Tso are currently awaiting LA28’s formal response regarding the public release of its contractor list.