I can very well see the consern by the local law depending on the type of group playing. [little old ladies that only carry a bibles arn't the main fans of ganster rap
] And if that local area has gang problems and the event holder has no insurance for the concert or proper security, like metal dectors at the gate....
They can easily use the no insurance loop hole as a good excuess.
But the event holders should know to get the support of local law before an event and make them fully aware of all said plans months ahead of time to take care of any such dips in the road.
Use to do setup and security at concerts and a good event manager knows better.
Id put it all on the event holders.