Years ago, I had a client who did exceptionally well at their outdoor event. They generated a profit of over $250,000 USD. In a moment of unbelievable generosity the entire $250,000 of profit was given away to all the volunteer organizations that provided help at the client's event.
After a year of working with the client, we amicably parted ways.
In the years that followed, I kept in touch with the event organizers. A few years and some atrocious weather later, the outdoor event was financially in the red.
Because they gave all their money away and had zero reserves, they were unable to pay their bills. Ultimately, the event was sold off to another organizer who acquired the event's debts.
What follows applies to every event. The mantra comes from extensive work with outdoor events, including air shows, beer festivals, and ethnic festivals. Most events that fail do so because they're unable to pay their bills.
It's short, simple, and to the point. The ultimate form of event insurance is cash in your bank account. Ideally a reserve account, separate from your operating account.
A great copywriter by the name of John Carlton once accurately stated, "money will only solve those problems that not having money creates." If you don't have one now, make sure you start a "rainy day" reserve account for your event.
If the former client above had set up a "rainy day" reserve account, they'd still be in business today.
I guarantee you, a reserve account will allow you to sleep at night when things don't turn out as planned.