A Royal Navy veterans group feared its annual parade had been scuppered when police insisted it must take out a £1m insurance policy to stage the event.
The 8th Destroyer Association was told it could not march through Scarborough, North Yorkshire, without public liability cover in case of trouble.
The group reluctantly paid £300 for the policy to ensure the event went ahead.
North Yorkshire Police said this year was the first time it had implemented the rules relating to public events.
"We are concerned with the safety of everyone involved in the parade including those taking part, spectators and our own officers," a force spokesman said.
"All event organisers must comply with health and safety legislation for both their protection and that of the general public.
"Without it, the organisers would be held personally liable for any injuries or damage caused as a result of the parade.
"The last thing we would want to do is cause upset among a group of people who have given so much to their country, but safety is of paramount importance."
The march organisers have also been told they must be accompanied by two lines of stewards in fluorescent jackets and have an ambulance in attendance.
Remembrance Day fears
Peter Lee-Hale, chairman of the 8th Destroyer Association, said: "I could understand it if we were a bunch of yobs marching through the town, but what trouble do they think an 80-year-old ex-sailor is going to cause?
"We've been marching for 18 years now and 13 of these have been in Scarborough. We've never had this problem before.
"The police have provided motorcycle escorts and everything has been fine.
"Now health and safety has reared its ugly head.
"What's going to happen on Remembrance Day when there are so many marches around the country? Are they all going to have to do this?"
He said the £300 cost of the insurance policy was significant for a group with a dwindling number of members which had to raise funds through events like raffles.
"But worst of all was the hassle of having to deal with officials and then not being told whether we could go ahead until a few days before.
"I'm 73 and one of the younger members. Most of them are in their late 70s and 80s and it is a lot to cope with."