The N.C.A.A. has been buying coverage for its men’s basketball tournament since the late 1990s, when its annual budget was less than $450 million in today’s dollars. (In its last pre-pandemic fiscal year, the N.C.A.A. reported about $1.1 billion in revenues, including $868 million in television and marketing rights fees.)

“You started to see increases in these media contracts, and it made people realize they needed to protect their revenue streams,” said Kathleen McNeely, the N.C.A.A.’s chief financial officer since 2011.

Underwriters and college sports officials believed there was a very low risk that the tournament, a vast event with games at sites across the United States, would ever be abandoned in its entirety. Trouble in one city, they reasoned, would be unlikely to wipe out all 67 games. And although executives feared something like the coronavirus pandemic, a full cancellation was still seen, over all, as a slim possibility.

“The likelihood of a full event cancellation and the long-term, widespread lockdown that Covid brought was so, so minute, so improbable,” Robinson said, “and that was evident in how the insurers rated the insurance.”

The N.C.A.A. paid a little more than $2 million for $270 million in coverage, a premium in line with the industry’s standard of anywhere from 0.5 percent to 3 percent of the amount covered. The policies backed up a sum roughly equivalent to the tournament’s ticket sales and about one-third of its media rights, which are imperiled when an event is not held.

N.C.A.A. executives and some outside analysts said it would have been too expensive to insure every dollar associated with the tournament — a position some critics have challenged in recent months. And college sports leaders believed that other parts of their emergency plan, including reduced payouts to schools, would keep the group afloat when combined with the insurance coverage.

Before the N.C.A.A.’s Board of Governors voted on March 12 to cancel the tournament — a decision reached during an unnerving conference call when Dr. Vivek H. Murthy, then a board member and now President Biden’s nominee for surgeon general, warned of the uncertainties surrounding the virus — Robinson spoke with the association’s insurers, a common step when a claim might be forthcoming.

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