I think the article indicates insurers need to do some due diligence on these festivals. Its unclear if Fyre even had insurance for a festival on a remote (basically unpopulated) island in the Bahamas. Most festivals aren't that ambitious in location.

The Fyre organizer basically didn't have it together: "Farland, 25, is alleged to have cheated at least two investors out of about $1.2 million by lying about the revenue and income of Fyre Media Inc., which he founded in 2016. He gave them phony documents claiming the company generated millions of dollars in revenue from thousands of artist bookings in a single year, when it really earned just $60,000 from about 60 performances, they said."[1]

https://www.bloomberg.com/news/articles/2017-07-01/u-s-charg...