The news is increasingly bleak for the founders of the South by Southwest conference, which was canceled today for the first time in its 34-year history.

Two founders of the event, which was set for March 13-22 in Austin, Texas, told The Austin Chronicle that the organization lacks insurance coverage for disease outbreaks. The festival was cancelled by city and county officials late Friday afternoon because of health concerns from the coronavirus outbreak.

SXSW co-founder Nick Barbaro – also the publisher of the Chronicle – said the its cancellation insurance does not cover a disease outbreak or the city declaring a “local state of disaster.”

His comment was backed-up by SXSW co-founder and Managing Director Roland Swenson, who said, “We have a lot of insurance (terrorism, injury, property destruction, weather). However, bacterial infections, communicable diseases, viruses and pandemics are not covered.”

Earlier reports indicated the possibilty that SXSW, which as recently as a day ago declared the show would go on, was waiting for the city to step in. The reports indicated that insurance would then be applied in a force majeure situation that would cover some of the losses.

The losses to the conference producers will ripple through the Austin economy. Many restaurants and bars rely on the spring event to survive, as 100,000 or more people descend on the town for the film/music/tech conference, pumping more than $350 million into the local economy.

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