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Hope on the horizon for UK cancellation insurance?

The UK culture secretary says that if commercial insurance for events is still unavailable by 21 June, the government will intervene

By IQ on 14 May 2021

Shambala 2021 was cancelled due to lack of insurance

Shambala 2021 was cancelled due to lack of insurance

After an ongoing battle for event cancellation insurance in the UK, the government has indicated it will intervene if commercial insurance is still unavailable when the country is scheduled to fully reopen.

In yesterday afternoon’s (13 May) DCMS (Department for Digital, Culture, Media & Sport) select committee meeting, secretary of state Oliver Dowden said that if events still cannot go ahead by stage four of the roadmap (21 June) because of market failure with commercial insurance, the government would “intervene in the same way we did with Film & TV“.

When Dowden was asked whether festivals and events should write off this summer, he answered “no”.

“My first priority is to make sure we get the events industry up and running, which requires us to reach stage four by 21 June,” said Dowden.

“Once we get to that point, if events still can’t go ahead because of the failure of a commercial insurance market, we stand ready to use government intervention in exactly the same way we did with Film & TV. I’ve had extensive discussions with the prime minister and chancellor on this but we must first know if something can go ahead, and if the final barrier is lack of commercial insurance then we can go about acting.”

When Dowden was asked whether festivals and events should write off this summer, he answered “no”.

In yesterday’s IQ Recovery Sessions, Festival Republic’s Melvin Benn revealed the formation of an ‘Events Indemnity Sprint Group’, which has been tasked by the government with finding solutions to the issue of events insurance.

When asked whether the government’s plan to intervene is coming “too late”, Dowden responded: “Through the Culture Recovery Fund (CRF) we have acted – particularly round two and with round three. There are challenges around bringing forward indemnity and insurance, firstly in not knowing we can fully go ahead with events from 21 June.

“It is not reasonable to expect the taxpayer to provide indemnity if it is not possible for the events to happen. There are also questions in relation to scope. At this stage, it would be better to get clarity exactly where the gap lies when things open, to then determine the extent of government intervention to fill the final mile.”

A recent AIF (Association of Independent Festivals) member survey revealed that 92.5% of respondents do not plan on staging their events without some form of government-backed insurance or indemnity scheme, with the measure being described as vital not optional.

“We stand ready to use government intervention in exactly the same way we did with Film & TV”

According to the association, more than 25% of the UK music festivals have already been cancelled due to a lack of government-backed insurance, including Glastonbury, Download and Boomtown.

Tim Thornhill of specialist brokers Tysers Insurance tells IQ: “On 21 June many more events this summer will have cancelled because of the pressure to pay deposits to the supply chain and increasing financial exposure of organisers as time is needed to plan and build events.

“This is despite the UK being ‘completely on track at the moment with the roadmap with the vaccination rolling out as planned’ said Dowden who has a ‘single-minded determination to get full reopening from the 21st June’. This determination and optimism need to be accompanied by setting up a government-backed insurance programme immediately. The planning and announcement of insurance need to run concurrently with the planning of safe events with the Events Research Programme (ERP) and successful pilots.”

The results of the UK government’s ERP will determine how larger events can take place in step four of the roadmap.

Insurance schemes have already been announced in Germany (€2.5bn), Austria (€300m), the Netherlands (€300m), Belgium (€60m), Norway (€34m) Denmark (DKK 500m) and Estonia (€6m).

Read more about the issue of event cancellation insurance via specialist brokers here.


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