The British government has launched a Live Events Reinsurance Scheme to protect events and festivals in the event of cancellation.
The scheme will be delivered through insurers with events organizers able to purchase cover for government-enforced cancellation due to the event being legally unable to happen due to Government-imposed Covid-19 restrictions.
According to the government, the scheme, worth over £750 million (approx $1bn), is “one of the only insurance schemes in the world to cover such a wide array of live events and not put a cap on costs claimed per event”.
If events do have to cancel, after organizers have covered the agreed excess, the government says that it, and insurers have an agreed risk share per claim.
This starts with government paying 95% and insurers 5%, progressing to them covering 97% and 3% respectively and finally government covering 100% of costs. The split depends on the losses incurred by the insurer from the scheme to date.
The scheme will be available from September 2021 and run until the end of September 2022.
The live events sector in the UK is estimated to be worth more than £70 billion annually to the economy and supports more than 700,000 jobs, including small businesses and the self-employed.
The scheme has been launched in partnership with Lloyds bank.
A number of prominent insurers in the Lloyd’s market, including Arch, Beazley, Dale, Hiscox and Munich Re are supporting the scheme which will provide events companies with the option of purchasing cover from next month, alongside standard commercial events insurance.
“For months, UK Music has been warning about the catastrophic impact of the market failure in insurance for live events.”
Jamie Njoku-Goodwin, UK Music
Jamie Njoku-Goodwin, Chief Executive of UK Music: “For months, UK Music has been warning about the catastrophic impact of the market failure in insurance for live events.
“The inability to obtain insurance has already caused many cancellations this summer – these have been devastating for the entire music industry and there were fears that without action we would have seen major cancellations continuing well into next year too.
“This new Government scheme is therefore incredibly welcome news – not just for the millions of music fans who have been looking forward to the return of live events, but also for the tens of thousands of musicians, crew members and wider supply chain workers whose jobs depend on continued live activity.”
“This is very welcome news and will help keep the sector and its employees working.”
Denis Desmond, Chairman, Live Nation UK
Denis Desmond, Chairman, Live Nation UK and Ireland, added: This vital intervention from the UK Government offers certainty to artists, concert and festival promoters in the live entertainment market.
“This is very welcome news and will help keep the sector and its employees working.”
“We are pleased that Government has listened, and we welcome this intervention to address the insurance market failure. It is positive that festival organisers will now have an option for Covid cancellation.”
Paul Reed, AIF
Paul Reed, CEO of the Association of Independent Festivals, said: “AIF has campaigned for a Government-backed insurance scheme for festivals for over a year, from raising it as a headline issue with the DCMS Select Committee to working with DCMS colleagues and presenting detailed evidence and data to support the case.
“We are pleased that Government has listened, and we welcome this intervention to address the insurance market failure. It is positive that festival organisers will now have an option for Covid cancellation.
“The scheme doesn’t, however, cover a festival needing to reduce capacity or cancel due to social distancing restrictions being reintroduced, so it remains imperative that Government continues to work with the sector in areas such as Covid certification to try and avoid such an eventuality and ensure that organisers can plan with increased confidence for 2022.”Music Business Worldwide
