The insurance coverage required for an event such as the NCAA Final Four tournament game is a typical Commercial Business policy. Tournament games are played at various arenas in regional locations to accommodate the size of the anticipated crowds.

Williams said that each location handles its own coverage.

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Unexpected outcomes

Game postponement is not covered under the policy, particularly if the game in question is an early game. Many venues find that game postponement is not necessary coverage because, due to the nature of the tournament, all of the games must eventually be played.

A mere change in date or time of the game will not significantly change the revenue outcome for the venue.

The real risk, from an insurance standpoint, are the later games, particularly during the Final Four. The Final Four games generally make bigger ticket revenue, and have a higher television price.

Since postponement isn't detrimental to the venue, cancellation becomes the biggest issue. A game may be cancelled for physical damage to the auditorium, including water damage, flood, or fire. A game may also be cancelled for terrorism threats or threat of an incident such as the recent shooting in Las Vegas.

If a disaster occurs that is so detrimental to the arena that the game cannot be played there, the venues insurance will respond for the lost revenue.

Even so, the event can be moved to another venue, and there are often contingency plans for such occurrences.

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The show, ur, game must go on

Fans who bought tickets to a game scheduled in Cleveland might not be eager or able to travel to Miami to watch a game, so their tickets will have to be refunded and re-sold in the event of a game cancellation or postponement.

Tickets must be reprinted, receipt numbers must align, row numbers must be changed, all banners, t-shirts, flyers, and souvenirs must be reprinted.

Costs associated with the adjustment from one venue to another would be covered.

Because of the popularity of the tournament, though, it is likely that a game, especially one further along in the tournament, will sell out no matter its location or the time the game will be played.

The venue may suffer from a loss of revenue, loss of sponsorship, and loss of food and beverage sales if a game is postponed from a primetime Saturday evening slot, to a Tuesday afternoon slot. Likewise television revenue is a large issue; advertising space may be at a premium on a Sunday night, while advertisers may not be willing to pay as much for a Tuesday afternoon.

All revenue sales are insured under the applicable insurance policy, so if the school cannot host, they will still receive something.

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Negative trickle-down

Vendors who come to the premises to sell food and beverages, as well as toy and t-shirt giveaways, each have their own insurance policy. Any liability stemming from those vendors, including personal injury such as food poisoning, should be covered under the vendor's policy.

Generally the venues chosen to host March Madness games are well known and well-suited to huge events, including sports events, festivals and concerts.

Williams said that underwriting is fairly easy with such well-known venues that regularly manage large crowds.

In case of an evacuation, venues are built with anti-slip flooring, and janitorial staff generally cleans up spills very quickly. In case of a newly constructed venue being chosen, the insurance risks could actually be smaller than known venues, as new venues are constructed with state-of-the-art features, and management may be brought in from other venues so they are already experienced in dealing with large crowds. Liability associated with large crowds becomes a big issue when discussing evacuation of the venue if a disaster occurs.

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The cost of securing an event

Just like any other large sporting event, local law enforcement and even the FBI are very watchful of these NCAA events, and security is very tight. Hopefully there will be no incident, but if there is a gunman, a bomb threat, or a terror threat, local law enforcement in host cities are trained to deal with disasters involving large numbers of people, and are well equipped to handle a situation if one arises.

The venue itself, and therefore its carrier, is not likely to be liable for losses from disasters or terrorists.

After the game, sometimes there will be altercations between the fans of the winning and losing teams. Law enforcement is also well equipped to deal with these types of situations, and can diffuse an altercation quickly if one arises.

Williams said that the venue also plays its part by shepherding event-goers through metal detectors before they are allowed to enter the event, and by cutting off alcohol sales some time before the end of the game, allowing fans to sober up a little before driving home or heading out to celebrate a win.

Fortunately for host cities, the NCAA fans are not quite as extreme as some other sports fans. Even so, if fans destroy vehicles or shops, the venue and its carrier are not liable for those actions and the carrier will not be called on to provide coverage.

Basketball games, especially at this level of competition, can quickly become rough, and a player's personal safety may be at risk. Since they are all college aged, NCAA players are often still covered under their parent's health insurance, or have health insurance through the school they play for. If a team loses a player due to injury, that is the team's problem, and they will have to replace the player for the remainder of the tournament.

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Facing down cyber threats

Cyber risks, and the precautions taken to prevent a cyberattack, are often unknown. In order to execute an effective attack, it would have to be very sophisticated to keep up with precautions put in place by the venue, law enforcement and television networks.

A cyberattack could interrupt the transmission of a game over network television, but this risk generally only becomes an issue with pay-per-view television programs.

Insurance coverage for losses that occur due to a cyberattack is available as a special policy.

Hannah Smith is a staff writer with FC&S Online, the recognized authority on insurance coverage interpretation and analysis for the P&C industry. To reach this writer, send email to [email protected].

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