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By GRAHAM BUCK, who covers European risk management issues

LONDON---When times are hard, warm weather and a royal wedding are two useful distractions. Britons are being treated to both this month. This Friday's special day for Prince William and Kate Middleton evokes memories from 30 years ago, when the marriage of Prince Charles and Lady Diana Spencer at St Paul's Cathedral took place against a backdrop of rapidly rising unemployment and riots across the country.

Scotland Yard is taking no unnecessary chances, having already rejected an application by Islamist group Muslims against Crusades to hold a protest outside Westminster Abbey, the venue for Kate and William's nuptials.

The Abbey and the route to be taken by the wedding procession are being regularly searched for explosives and parking will be temporarily banned in 80 neighboring streets from Thursday evening. On the wedding day itself, 5,000 police officers have been allocated to control the crowds and up to 80 close protection teams will provide protection for attending VIPs.

The security bill is estimated to be in excess of $33 million, as there is also worrying evidence in Northern Ireland that terrorist cells hived off from the Irish Republican Army (IRA) are resuming activity and may be planning an attack on the mainland, possibly as a prelude to the 2012 Olympics.

Nonetheless, many Britons are willing to foot the expense. Although the royal family has lost more than a little luster over the past three decades, an estimated 2 million people will be attending street parties across the country. The total is well below the 10 million who marked the Queen's Silver Jubilee in 1977, but double the number that the Golden Jubilee celebration in 2002 attracted. London alone has more than 850 events scheduled, with many broadcasting the wedding live on big screens.

Local councils were leant on by the government to relax their more onerous health and safety demands. Prime Minister David Cameron spoke out against street parties being thwarted by "petty bureaucracy" and said that local authorities should not interfere with planned celebrations.

STREET PARTY INSURANCE

"If you want to run a street party in the United Kingdom, apart from a few exceptions, most councils and local authorities will require you to have £5 million ($8 million) to £10 ($16 million) worth of public liability insurance to be able to close the road," said Jon Wilkinson, chief operating officer at Lloyd's coverholder WorldWide Special Risks.

Worldwide has launched a "low value, niche" policy especially for the event. "When you are running a small street party, that can be quite expensive," he said.

Other responding insurers include Zurich, which is offering a public liability insurance cover for a party attended by up to 200 people for a one-off premium of about $100 (£63.60).

"By ensuring that individuals have access to the right insurance for these types of events, we aim to remove any potential barriers to them taking place," said Paul Emery, Zurich's head of community and social organizations. "We wanted to provide peace of mind to enable everyone to focus on enjoying the festivities."

Skeptics retort that many Britons are more enthusiastic about an extra day off work than the wedding itself. That enthusiasm has not extended to many of the U.K.'s retailers and smaller businesses, which will suffer financially.

Savvier workers noted that the lateness of Easter this year would enable them, if they booked three days off this week, to gain an extended 11-day break stretching to Monday, May 3, the public holiday across Europe known as May Day. According to finance provider IGF, the timing creates a "right royal headache" for many firms.

"Payments will slow down, which could cause real cash-flow problems," said the group's Managing Director Tracy Ewen. "There is a real risk that payments won't get made, checks won't get signed and small businesses will experience real problems over this period."

This dismay in the business world has one notable exception: The financial services sector, which in addition to insuring street parties, has used the event to advertise everything from prenuptials to engagement ring insurance.

April 26, 2011

Copyright 2011© LRP Publications