Spectators walk off the course during a second rain delay during the first round of the U.S. Open golf tournament at Merion Golf Club, Thursday, June 13, 2013, in Ardmore, Pa. (AP Photo/Darron Cummings)

It was no surprise that weather would become a factor for the U.S. Open at Merion Golf Club last week.  The real surprise was how unaccommodating the rainout policy was for fans that traveled to the Ardmore golf course.

A wide-spread bow-echo pushed across Pennsylvania Thursday morning, stopping many golfers in the midst of their first round and delaying golf some two-plus hours.  Fans were asked to leave the golf course, and many fans didn’t return because of the lack of shelter.

Fans that chose to call it quits would not be compensated thanks to the USGA rainout policy enforced: if four-hours of golf are played on the day of your pass, the day is considered full and reimbursements of any kind will not be given.  While most sports simply reschedule the whole event to a different date, golf is a very fluid event, and organizers attempt to get as much completed before darkness halts a round.

Rain falls at Merion Country Club on the eighteenth fairway, the site of the 2013 U.S. Open. (AP Photo/Gene Puskar)

Fans owe it to themselves to understand the inclement weather policies when headed to outdoor sporting venues – lest they not only get soaked but also lose their shirt.

For their part, many sports venues have studied (or learned about) the financial risks posed by bad weather and taken steps to protect themselves.

I had the chance to speak with Christian Phillips, an underwriter at Beazley Insurance Company.  Many of Beazley’s main clients are sports teams and venues, who seek compensation when weather, among other things, takes aim at their events.  Phillips was able to give me an overview of what goes in to determining insurance coverage for businesses relating to outdoor events similar to the U.S. Open.

Q: Do you have one type of business which buys insurance the most?

A: The way the product is designed, we have flexible products. … [and] we have multiple – different product lines.  For example, we have golf courses, which have [weather-related] closures; or theme parks which have really bad summers.  There really are a mixed bag of companies which are in the industry that we cover.

Q: If I were to own a business, what type of business should own weather insurance?

A: [W]e did a study back in the United Kingdom a couple of years back, and we found that 75-80 percent of businesses are actually affected by the weather in some shape or form.  Whether it be too hot, too cold, too wet, too dry, too snowy, or not snowy.  So realistically, the majority of businesses are affected by the weather, and we recommend most businesses be protected from the weather.

Q: After a weather event, how would a client know whether they should file an insurance claim, or look for some other form of help (e.g. from FEMA)? 

A:  I think it depends [on] really the cover[age] they’re buying.  If it’s a large event like the U.S. Open which was massively affected [Thursday], due to the heavy rains, they buy insurance policies…. They’ve got … ticket refunds, sponsorship bills, and ultimately if [one of those] was an exposure area, [and] non-insured, we try to fit our products and fit their needs.  We do look at the contracts, and generally insurance is the preferred option.

Grandstands sit empty during a rain delay during Round One of the 113th U.S. Open at Merion Golf Club on June 13, 2013 in Ardmore, Pennsylvania. (Photo by Rob Carr/Getty Images)

Q: How much do you estimate is lost every year from weather damage by people who aren’t insured?

A: That’s a tricky question.  It really depends on that particular year [weather-wise], so I wouldn’t be able to give a figure…  The key thing is that we are seeing extreme weather over the past five years, a lot more flash flooding, and things like that are very difficult to prevent against.  Really it’s a matter of making sure you’ve got the insurance coverage to protect you if you have to cancel your event.  We are seeing more and more events that are obviously becoming impacted because of extreme weather events.

Q: How do your underwriters gather climate data and information and incorporate it into what to expect for the future when presenting the information to clients?

A: The way we are set up, we start investigating weather data from thousands and thousands events from around the world.  We look at the weather data historically in certain areas and see if the event will be impacted by looking for trends.  It enables us to become more scientific about our underwriting.  With the internet today there is so much data available, and about three to four years ago we invested time in resourcing weather stations globally, looking at precipitation, snowfall, temperature, and what we do is we put that into a system.

Most of the data we are getting have been put through algorithms which compensate for any data that are missing, and we look at other data from other stations around the area.  This then gives us a very robust set of data we can look back on.

If we’ve got an event coming up in a certain area, we then have at least thirty years of hourly [observations] for most data [types].  Some locations around the globe are every three-to-four hours.  We pull that into one big weather database.  This allows us to dissect the data for one location for an event.  We can look at the trending on the data with one robust tool.  This enables us to present that to the insurer.

Q: What kinds of changes have you seen which might correlate with climate change and more severe weather?

A: I think the key thing is certainly the last 3-4 years; all records have been broken at some times in some territories.  There certainly is more rain falling in a shorter given period of time than we have seen before in the data when you look back at it.

* Adam Rainear is a Capital Weather Gang summer intern