Chicago's bid for 2016 Olympics

An interesting development just transpired in Chicago's bid for 2016 Olympics. Mayor Daley had been reluctant to sign the contract with IOC. This provisioned that the host city will have full ownership of financial cost of sponsoring the summer Olympics. China had spent 13 bllion Yuan or close to $2B to finance the recent 08 Beijing Olympics.

AON is willing to underwrite the insurance to cover $500 million in the event the city's cost exceeds revenues accrued from hosting the games. Mayor Daley's was reluctant to stick the cost of the games to Chicago taxpayers. I am wondering however what is the premium or cost of this insurance policy? AON's policy will not be pro bono, it will come at a cost. However, this is a win/win situation for the city and 2016 bid team. The caveat is, how much policy is enough. The statisticians, demographers, consultants and forecasters better be accurate on their pessimistic, most likely, and optimistic forecasts, i.e., to ensure some semblance of accuracy on their sufficiency of insurance amount.

Not foreign to performance bonds and other insurance policies for vendors and contractors, this definitely is a development in the right direction for the city to move forward with the bid. Now if they can now convice all Chicago Aldermen, that the city taxpayers will not pay $1 in case the 2016 Olympics bleeds red ink, it is "all good."