Hosting public events sets the University back more than just the cost of staff, food and drinks.
Insurance for large events -- like commencement or football games -- can be a major expense, to the tune of hundreds of thousands of dollars.
And that cost is growing.
According to a recent Wharton School report, mass gatherings put universities at high risk for terrorist attacks.
The key to dealing with the rising costs, the report says, is the extension of federal terrorism insurance.
The 2002 Terrorism Risk Insurance Act established the government as a secondary provider of terrorism insurance. Congress is trying to hammer out an extension of the act before Thanksgiving. If no agreement is reached, the act will expire in December.
United Educators Insurance, a firm studied in the Wharton report, said a White House push to cut coverage will increase universities' costs dramatically.
In its own examination of the act, the White House is urging Congress to cut general liability insurance, which insures against lawsuits.
Penn currently purchases general liability insurance, which includes protection in the event of a terrorist attack. The insurance covers lawsuits claiming negligence on the part of the University, for example.
Without federal coverage, United Educators estimates costs to universities could increase by anywhere from $750,000 to $1 million. The firm is currently circulating a letter to members of Congress urging them to uphold general liability insurance.
Although the Wharton report recommended extending the Terrorism Risk Insurance Act, Wharton researchers did not focus directly on general liability, said Howard Kunreuther, co-director of the Wharton Risk Management and Decision Processes Center.
An author of the report, Kunreuther said universities face a definite threat.
"If terrorists are trying to attack and kill a large number of people, they could do it at a football game," he said.
Ken Hoffman, who handles Penn's insurance policies, said the risk to Penn is on par with that to any building in a major metropolitan area. He added that general liability coverage must not be dropped.
"At this point in time, [an extension of the act] should apply to all [terrorism] coverage. Otherwise it creates a gap in the protection ... which we would have to go out and attempt to fill," he said.
Erwann Michel-Kerjan, a Wharton research fellow who worked on the report, said the Bush administration's initial stance against extending the act was "strange," considering its emphasis on national security.
But the July attacks and recovery efforts in London may have persuaded the administration to support the act, he said.
And although the University must remain cautious and work to increase security, students should not let the threat of terrorism hold them back from their daily lives, Michel-Kerjan said.
"When you go to the airport, you have screening. That doesn't mean that you stop flying," he said. "If you stop going to the stadium ... terrorist[s] have won."
