The potential for terrorist attacks on events staged during this week's Republican party convention in New York has driven rates for cancellation cover up by as much as 30%, according to Marsh.

Marsh head of entertainment and media Leconte Moore said: "The terrorism fear factor has made underwriters more cautious and rates for cancellation cover may have gone up by 10%-30%."

Brokers said cancellation cover, as well as liability cover, for events at the convention had been hard to purchase because of the "concentration of risk" in the area. Sources said demand for event cancellation cover for the Republican convention had been greater than that for similar events at the Democratic convention in Boston. This was due to New York being the centre of the 9/11 attacks, one broker said.