"I can confirm that our insurance policy did not cover bacterial infections, communicable diseases, viruses and pandemics," he said in an email.

The Austin Chronicle reported last week the organization does not have insurance covering the cancellation, citing two founders, and CNBC reported on Thursday that the festival will be on the hook for "tens of millions of dollars".

Businesses looking to buy cancellation insurance for events around the world will not be able to get cover for the new coronavirus outbreak, industry sources said, as insurers rush to exclude the infectious disease from their policies.

Many businesses do not buy the extra epidemic cover, but large events are usually more likely to have it.

Read also: SXSW canceled as tech and entertainment world faces coronavirus

For some of the organizers planning music, sporting or trade events now, who buy insurance up to two years in advance, there will be no protection.

The Shanghai Grand Prix and the Mobile World Congress in Barcelona are among sporting events and major conferences canceled as a result of the outbreak.

Known as SXSW, the annual showcase of pop culture had been scheduled to run March 13 to 22. Organizers and local officials said at a news conference last week they had concluded it was unwise to draw crowds of people together in close proximity.

SXSW began 33 years ago as a music festival but evolved to also highlight technology, video games, TV shows and movies. It has become a major promotional event for media and tech companies and last year attracted more than 417,000 people.

The spokesman for the festival declined to name the insurer for its event cancellation policy.