Many AEA theaters are now foregoing understudies as well - the cost of hiring, rehearsing them, costuming theme - is just not worth the insurance - since the runs are often short enough, and past history within the theater proves they just don't loose performances . . .
But I find it scary, a lot of times BECAUSE a theater doesn't have understudies an actor, who normally would call out sick, goes on - and often times not given an ideal performance.
When working without understudies, you need to talk to your producer and ask the hard questions about what happens if someone goes out - - - does the director step in on script, do you cancel - are their internal covers that could happen?