Live event organisers can now purchase insurance that will cover costs if their event has to be cancelled or delayed due to a government-imposed lockdown
Sign up for IQ Index
The latest industry news to your inbox.
Event organisers have not been unable to obtain quotes despite the scheme being opened by chancellor Rishi Sunak nearly a month ago
By James Hanley on 19 Oct 2021
Concerns are growing within the UK business about the government’s much-trumpeted £800 million insurance scheme for live events.
The Live Events Reinsurance Scheme, announced at the beginning of August, will cover costs incurred if an event has to be cancelled, postponed, relocated or abandoned due to a government-imposed lockdown in response to Covid-19.
However, Association Of Independent Festivals chief Paul Reed says that not only is the extent of the cover available limited, event organisers have not even been able to obtain quotes so far – despite the scheme being opened last month by chancellor Rishi Sunak.
“It doesn’t cover a festival needing to reduce capacity or cancel due to restrictions being reintroduced, and it’s clear from the government’s winter ‘plan B’ that restrictions will be reintroduced long before there is any sort of national lockdown,” says Reed.
“The scheme only covers you in the event of a civil authority shutdown at either local or national level, so it is extremely limited in scope. We surveyed members on this recently and asked them how likely they would be to pursue quotes, and 58% said ‘not likely’, 5% said ‘very likely’, 21% said ‘likely’ and the remainder said ‘unsure’. That isn’t indicative that the scheme is going to be widely used by the sector.
“We surveyed [AIF] members on this recently and asked them how likely they would be to pursue quotes… 58% said ‘not likely’”
“At the moment, you can’t obtain actual quotes, so that’s another issue. Until this is properly in play, we won’t know the full extent of these issues and whether it is a viable scheme or not. So they need to get on with it and get it in a position where it can be rolled out properly.”
The cover, which is a partnership between the government and the Lloyd’s of London insurance market, is now available to purchase alongside standard commercial events insurance for an additional premium.
To be eligible, event organisers must purchase the relevant cover from participating insurers within the scheme, including Arch, Beazley, Dale, Hiscox and Munich Re.
Premium is set at 5% of the total value of insured costs (plus Insurance Premium Tax) and claims will be subject to an excess of 5% of the value of the insured costs or £1,000 (whichever is higher) per policy.
“Another concern is the fact that it doesn’t cover artists or workforce”
“Another concern is the fact that it doesn’t cover artists or workforce,” adds Reed. “So I think, as it currently stands, it’s going to take a bit of work from government to get to the point where it will be more widely used.
“I appreciate government has put a lot of work into this. There are still details being thrashed roughed out around the scheme and questions that the sector has put to government, so the scheme could well change in some ways. But I think the fundamentals aren’t going to change and it’s not going to cover anything other than some sort of shutdown – that’s basically a trigger point that the government has agreed with the insurance industry.”
Solo Agency boss John Giddings previously dismissed the scheme as a “joke”.
“They want far too much money and there are too many caveats in it,” he told IQ. “I think they just keep paying us lip service like they have done all the way down the line.”
In Australia, meanwhile, live music figures continued to pressure the government to underwrite Covid cancellation insurance for live events at a parliamentary hearing last week. The Senate committee will report back on the bill by 3 November before it is voted on, reports Australasian Leisure Management.
John Watson, president of music company Eleven, described the lack of insurance options as “market failure”. More and more people are just saying it is too risky to take on touring,” he told ABC.
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.