The UK government has launched a live event reinsurance program to protect events and festivals in the event of cancellation.
The program will be provided by insurers with event planners able to purchase government-imposed cancellation coverage due to the event’s legal inability to occur due to Covid-19 restrictions imposed by the government.
According to the government, the program, worth over £ 750 million (around $ 1 billion), is “one of the only insurance schemes in the world to cover such a wide range of events in direct and not to cap the costs claimed per event “.
If events need to be canceled, once the organizers have covered the agreed deductible, the government declares it and insurers have an agreed share of risk per claim.
It starts with the government paying 95% and the insurers 5%, progressing to them covering 97% and 3% respectively and finally the government covering 100% of the costs. The distribution depends on the losses suffered by the insurer since the plan to date.
The program will be available from September 2021 and will run until the end of September 2022.
The UK live events industry is estimated to cost over £ 70 billion a year for the economy and supports over 700,000 jobs, including small businesses and the self-employed.
The program was launched in partnership with Lloyds Bank.
A number of leading insurers in the Lloyd’s market, including Arch, Beazley, Dale, Hiscox and Munich Re, are supporting the program which will offer event companies the option to purchase coverage starting next month, in addition standard commercial event insurance.
“For months, UK Music has warned of the catastrophic impact of the failure of the insurance market for live events.”
Jamie Njoku-Goodwin, British Music
Jamie Njoku-Goodwin, Managing Director of UK Music: “For months UK Music has been warning about the catastrophic impact of the failure of the insurance market for live events.
“Failure to obtain insurance has already caused many cancellations this summer – these have been devastating for the entire music industry and there were concerns that without action we would have seen major cancellations continue. until next year as well.
“This new government program is therefore incredibly welcome news – not only for the millions of music fans who have been eagerly awaiting the return of live events, but also for the tens of thousands of musicians, crew members and workers. of the broader supply chain whose jobs depend on continued direct activity.
“We are pleased that the government has listened and we welcome this intervention to address the failure of the insurance market. It is positive that festival organizers now have an option for Covid cancellation. “
Paul Reed, FIA
Paul Reed, CEO of the Association of Independent Festivals, said: “The AIF has campaigned for a government-backed festival insurance scheme for over a year, be it the to raise as a major issue with the DCMS select committee, to work with DCMS colleagues and to present detailed evidence and data to support the case.
“We are pleased that the government has listened and we welcome this intervention to address the failure of the insurance market. It is positive that festival organizers now have an option for Covid cancellation.
“The program does not, however, cover a festival that needs to reduce capacity or cancel due to the reintroduction of social distancing restrictions, so it remains imperative that the government continue to work with the industry in areas such as Covid certification to try to ‘avoid such an eventuality and ensure that the organizers can plan with increased confidence for 2022. “Music trade around the world