The UK government has finally announced a state-backed cancellation insurance scheme for music festivals and other large-scale events that will cover any losses incurred if a festival or event has to be cancelled as a result of any future COVID shutdown.
The music industry has been calling for such a scheme for more than a year now, with a flurry of music festivals that – it turns out – could have gone ahead this summer having to cancel earlier this year because no cancellation insurance was available on the commercial market.
In the absence of insurance, many independent events simply couldn’t afford to keep spending money on their 2021 editions when there remained a chance that COVID regulations could extend resulting in a last minute cancellation.
Nevertheless, British ministers resisted calls to intervene from both the industry and MPs, even as the number of 2021 festivals having to cancel mounted up. However, they did say they’d probably set up some sort of insurance scheme once COVID rules had sufficiently relaxed to allow full capacity events to go ahead. That happened in England on 19 Jul.
Last night, the government stated: “As the economy reopens with the lifting of COVID restrictions, getting the right kind of insurance is acting as a barrier for some events organisers. So the government has partnered with [insurance market] Lloyd’s to deliver the Live Events Reinsurance Scheme … The scheme will see the government act as a ‘reinsurer’ – stepping in with a guarantee to make sure insurers can offer the products events companies need”.
“The pandemic is not over”, it went on, “but with a sufficiently high proportion of the population vaccinated, the country can learn to live with COVID-19 without the need for the strict economic and social restrictions. This scheme will support live events across the UK that are open to the general public – such as music festivals and business events. It will cover costs incurred in the event of cancellation due to the event being legally unable to happen due to government COVID restrictions”.
Ministers also confirmed that “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, giving them the reassurance they need to plan ahead while also ensuring value for money for taxpayers”.
Commenting on the late-in-the-day-but-better-than-nothing-I-guess insurance scheme, the government’s Chancellor Of The Exchequer, Rishi Sunak, added: “The events sector supports hundreds of thousands of jobs across the country, and I know organisers are raring to go now that restrictions have been lifted. But the lack of the right kind of insurance is proving a problem, so as the economy reopens I want to do everything I can to help events providers and small businesses plan with confidence right through to next year”.
The live industry has welcomed the launch of the state-backed insurance scheme, even if some nitty gritty still needs to be worked out, and other COVID schemes will still be required. For example, the Association Of Independent Festivals says that if future COVID rules required capacity cuts but not full on cancellation, then the proposed insurance scheme might not help a promoter.
AIF CEO Paul Reed stated: “AIF has campaigned for a government-backed insurance scheme for festivals for over a year, from raising it as a headline issue with the Digital, Culture, Media & Sport select committee [in Parliament] to working with DCMS colleagues [in government] 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”, he added. “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”.
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