The show must go on is the old saying, but any experienced eventplanner will tell you that’s not always possible. There are toomany factors that are out of their hands: issues with performers,inclement weather and, increasingly, potential disruptions fromriotous crowds, protestors and even potential terror acts orthreats.

It’s a lot to manage, and any one of these disruptions canquickly turn what looked like a profitable event into one thatcauses organizers to lose more than just a little sleep. Handlingall of these contingencies independently is extremely difficult,and more event planners and organizers are now using insuranceprotection to manage their risks and limit their potentialdownside.

Sorry, this event has been canceled

Any big event, like the Olympics, a major league baseball game or aRolling Stones concert, is going to be covered by insurance torecoup losses if the event needs to be cancelled or abandoned. Thebigger the event the more coverage the organizers want to buy, withcoverage limits in the billions of dollars for large internationalcompetitions that have increasingly expensive television rightscontracts. This coverage is necessary because you can’t control theweather or having a performer gets sick or injured before theevent, and it’s not always possible to reschedule to an alternatedate.

Event cancellation coverage is also now being purchased forsmaller and more local events like county fairs, symphony orchestraconcerts, minor league baseball games and many others that carrymajor financial risks for the organizers if they are canceled orabandoned. Even if the event can be rescheduled, there areadditional costs incurred that insurance can help cover.

A rainy day policy

Organizers can insure against a rainout, but the bigger concern isoften the events that aren’t cancelled, but that experience badweather. If it’s too wet, hot or cold fewer people are likely toattend, and even those that do will spend less time at the event,and less money on concessions. That is exactly what happened atthis year’s Governor’s Ball, a music festival in New YorkCity, where severe rain the Saturday night of the festival causedmuch of the crowd to leave early before the Sunday show wascanceled entirely.

Weather insurance protecting against unseasonable conditions isin demand for industries that depend on good weather, like golfcourses. These policies protect against a drop in revenuesassociated with weather that is too hot, cold or wet for golf andkeeps people away from the course. Event organizers can alsopurchase coverage for a wide variety of events, with organizersreceiving compensation for an agreed percentage of projectedrevenues once a specific trigger, say half an inch of rain over afour-hour period, is reached.

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A United States flag waves next to carnival rides asfireworks burst in the air during the Fourth of July IndependenceDay show at State Fair Meadowlands, July 3, 2012, in EastRutherford, N.J. (AP Photo/Julio Cortez)

Threats — known and unknown

Threats far outside an event organizer’s control, and oftenunrelated to the event itself, can put event attendees at risk andcause a postponement or cancellation. The horrific terrorist attacks in France last year,including an attack outside a France vs. Germany soccer match, werea sad reminder that large events are an appealing target forterrorists.

Security has increased at events worldwide since these attacksand others that followed in the first half of 2016. Although manylarger events regularly have insurance against terrorist attacks,other disruptions including protests, riots and the threat of anattack can also lead to event cancellations, but they aren’t alwayscovered by insurance.

Event planners and law enforcement officials need to prioritizethe safety of attendees and are likely to err on the side ofcaution, given the number of terrorist attacks worldwide over thepast year. Many times the decision is out of the event organizer’shands entirely, and law enforcement directs the organizer to cancelor abandon an event.

Earlier this summer, The Band Perry had to cancel a planned Delawareconcert after the venue received what was deemed to be acredible threat of terrorism from a man planning to bring guns tothe sold-out show. Organizers can protect themselves, andattendees, by purchasing coverage that will respond to a variety ofpotential disruptions and threats.

Plan for the best, prepare for theworst

Event organizers work hard to maximize attendance and revenues attheir events, but there are many things that are out of theircontrol. Whether they encounter known potential problems like arainy day, or unknown problems like protestors blocking theentrance to the venue, insurance is an important part of managingevents for success.

Brokers and agents can help event organizers gain more certaintyby creating risk management programs that address the full scope ofthe potential disruptions they may face.

Christian Philips is U.S. focus group leader, Contingency,for Beazley. He can be reached at [email protected].