VANCOUVER, British Columbia—The XXI Olympic Winter Games in Vancouver are covered by billions of dollars in insurance limits to protect against a host of perils from terrorism to a lack of snowfall that could derail the competition and lead to huge losses for organizers, broadcasters and others involved in staging the event.

Abandonment and cancellation are widely seen as the biggest fears of the Lausanne, Switzerland-based International Olympic Committee and others that have huge sums invested in the 17-day Olympiad that begins Feb. 12.

The Winter Games are expected to feature around 6,850 athletes and officials from more than 120 countries. Ten thousand media representatives will be on hand to chronicle the competition, according to the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games.

“The cancellation of the event itself would cause a massive loss,” said David Bruce, head of specialty underwriting at Hiscox Ltd.'s Syndicate 33 at Lloyd's of London.

Mr. Bruce estimated that there is $2 billion to $2.5 billion in abandonment and cancellation coverage in place for the Vancouver games. He confirmed that Hiscox is involved in insuring the event but would not reveal the names of policyholders or specifics about coverage the insurer has written.

Organizers, broadcasters, sponsors, advertisers and others are among those with an interest in protecting themselves against the possibility that the Olympics could be canceled or abandoned, Mr. Bruce said.

Lori Shaw, managing director-sports and leisure for Aon Corp.'s Aon Entertainment Group in Charlotte, N.C., said there is limited capacity and high demand for cancellation coverage of the scale needed for the Olympics. “So you have a lot of parties with large financial exposures at risk that are looking to the event cancellation marketplace, which is somewhat of a finite capacity marketplace, because it doesn't have as many insurance players as ...more traditional lines of coverage.”

The coverage, though, has gotten cheaper, Mr. Bruce said. “Most of this is placed in the contingency market, which is very competitive. Prices have fallen quite drastically” since the Beijing games.

The IOC's cancellation/abandonment coverage is written as part of a revolving program that covers the organization for a series of games. Aon Benfield placed coverage under the program for the 2006 Winter Games in Turin, Italy, and the Beijing Olympics in 2008. The program also covers the 2012 summer games in London and the 2014 winter games in Sochi, Russia, according to London-based Aon Benfield.

Swiss Reinsurance Co. and Munich Reinsurance Co. are lead reinsurers in the revolving program, company representatives said.

Ms. Shaw pointed out that VANOC is responsible for its own cancellation coverage, apart from that purchased by the IOC.

Hans Steffen, Zurich-based head of specialty risks at Swiss Re, said insureds sometimes negotiate cancellation coverage well in advance because a cancellation could occur years before an event.

General liability coverage typically is purchased at the same time as cancellation coverage, on a multiyear subscription, Mr. Steffen said. “This is standard coverage which you then have to adapt to cover the specific sites of the event,” and generally is bought by organizers to cover injuries to visitors and athletes when, for example, they are being transported between venues, he said.

Strict confidentiality agreements have kept Aon Benfield and insurers from revealing specifics of the coverage for Vancouver. The IOC and VANOC did not respond to requests for coverage information.

NBC Universal Inc. is among those with a lot riding on the successful completion of the games. Published reports quoted Dick Ebersol, chairman of NBC Universal Sports & Olympics, as saying the network will lose money televising the Vancouver games. He attributed the projected loss primarily to the rights fee to broadcast the games, said to be $820 million. If the games were canceled, NBC's woes would be compounded by lost ad revenue if it were uninsured.

“We have purchased an insurance policy to protect us against a disruption or cancellation,” an NBC spokesman said.

Mr. Steffen confirmed that TV transmission rights are expensive, costing an estimated $250 million to $300 million for the 1984 Los Angeles Games and rising to more than $1.7 billion for the Beijing Olympics. It is typically covered under a cancellation policy, he said.

While insurers are tight-lipped on coverage specifics, Mr. Bruce said one of the biggest concerns has been the possibility that the H1N1 flu virus could disrupt the games.

Natural catastrophes also are a worry for the games, he said. “Vancouver is in an earthquake zone. Actually, a really big powerful earthquake would sink the Olympics.”

The risk of terrorism would be another peril considered by policyholders, said Mr. Bruce. The games could even be susceptible to the fallout from a terrorist event in another part of the world if it frightened people into canceling their travel plans to Vancouver, he pointed out.

Weather also could play a part in delaying or canceling competition, and there is insurance available for that, Mr. Bruce said.

The weather risk is one the Vancouver organizers addressed with a contingency plan late last month. Unseasonably warm weather left the Cypress Mountain venues short of snow needed to hold the snowboarding and freestyle skiing events. The area's alpine runs were closed early so more than 300 truckloads of snow could be moved from the top of nearby Mount Strachan to the event venues.

VANOC did not reveal the cost of reworking the venues, but the cost would be covered only if it is a peril specifically in the organization's policy, said Mr. Bruce. While the expense of reconstructing a venue would not be covered if the peril isn't specified, revenue lost because an event was abandoned because of weather conditions would be insured under a typical policy, he said.