Insurance for the promoter of an outside event, e.g. outdoor play, that depends on specific weather conditions. The policy pays if, for example, a preset rainfall level is exceeded leading to cancellation or reduced attendance. See ABANDONMENT OF EVENT; WEATHER RISK; PLUVIUS POLICY.
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The basic purpose of “weather insurance” is to give payouts by estimating the percentage deviation in output due to adverse deviations iin weather conditions. In weather insurance the contingent claims are determined by an objective weather parameter (such as rainfall, temperature, humidity) that is highly correlated with the type and class of production unit. Particularly, related to crop production.