Athens 2004 would be the first modern Olympiad to be insured against cancellation. The decision comes amid growing fears about increasing construction delays and concerns that Greek security may not be up to scratch.
The IOC confirmed on Sunday that it was negotiating more than £ 100 million ($240 million) of insurance coverage to protect against the full or partial cancellation of the Games, but a spokeswoman insisted that the decision does not indicate a lack of faith in the Greeks.
However, insurance experts said they doubted whether the IOC would find insurers at such a late stage for such a high-risk event.
Scotland Yard is so worried about security that it is considering controversial plans to arm British police officers in Athens.
An IOC source said that there was no understudy city standing by to host the Games in case Athens was not able to do so.
A final decision on whether to purchase the coverage could come at the May meeting of the executive board.