Event cancellation insurance is a specialized realm. But during the coronavirus pandemic, it has shored up the balance sheets of sporting events around the world.

By Alan Blinder and Kevin Draper

The money came in wire transfers, each one a boon for a beleaguered N.C.A.A.

In March, the coronavirus pandemic had eviscerated the Division I men’s basketball tournament, which had been poised to bring in more than $800 million. But by the end of June, N.C.A.A. executives knew that a crucial lifeline, one burrowed in the black-and-white language of five insurance policies, would soon come through: $270 million in cash — among the largest pandemic-related payouts in all of sports.

“It was one of the simpler claims processes,” Brad Robinson, the N.C.A.A. official who coordinates insurance matters, said in an interview in early February, soon after the association acknowledged that insurance proceeds tied to event cancellations accounted for more than half of its revenues during its 2020 fiscal year.

The specialized insurance policies, which cover cancellations because of communicable disease outbreaks, have historically been scarcely noticed but have proved crucial for parts of the sports world to weather the pandemic. Ordinarily products purchased to guard against the financial fallout of terrorism, severe weather and other unexpected setbacks, policies have helped salvage the balance sheets of events as small as local road races to competitions as wealthy and mighty as the sprawling N.C.A.A. tournament.

Now, insurers are bracing to see whether the Tokyo Olympics, already postponed from 2020, will happen, and industry experts said a cancellation would fuel several billions of dollars in losses across a number of organizations.

And with pandemic policies now largely unavailable — or extraordinarily expensive when they can be found — events that did not already have coverage for 2021 may be at risk of financial collapse if they cannot be held.

“If you have a $20 million event, you may only be able to get $1 or $2 million” of it covered for infectious disease, said John Beam, executive vice president for the sports and entertainment practice at the risk management firm Willis Towers Watson and a broker whose clients have included the N.C.A.A., Major League Baseball and the College Football Playoff. “That doesn’t really address what we want.”

Nathan Nicholas, the chief executive of Nicholas Hill Group, a Colorado Springs firm that works on insurance issues with national governing bodies like U.S.A. Fencing and U.S. Rowing, said that a year and a half ago, disease coverage was only sometimes a pivotal concern. “Pandemics,” he said, “were a bit of an afterthought,” so much so that at least one major provider used to offer free coverage for communicable diseases.

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