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UK gov-backed insurance scheme paid out only once

The widely criticised Live Events Reinsurance Scheme collected £5.9m premiums to cover 169 events and paid out to just one

By Lisa Henderson on 24 Apr 2023

The UK government-backed insurance scheme for live events paid out just one claim of £180,500, while generating almost £6 million in premiums, according to the Financial Times.

Launched in September 2021, the £800m Live Events Reinsurance Scheme was designed to cover costs incurred if an event had to be cancelled, postponed, relocated or abandoned due to a government-imposed lockdown in response to Covid-19.

It did not, however, payout if a festival needed to reduce capacity or cancel due to restrictions being reintroduced. Nor did it cover an event cancelled due to an artist or production staff catching Covid.

The year-long programme collected £5.9m premiums to cover 169 events and paid out to just one – Trick Scotland, an electronic music festival that was cancelled because the venue was needed as a vaccination centre. These details were published by the Treasury in response to a freedom of information request by the FT.

The live industry previously expressed concerns about the “extremely limited scope” of the scheme, with one promoter even dismissing it as “a joke”.

Umbrella body LIVE (Live music Industry Venues and Entertainment) today (24 April) told IQ it has failed to find a member that has used the scheme.

“Despite government’s best efforts, the reinsurance scheme was never right for our industry,” says Jon Collins, CEO of LIVE. “It was expensive, arrived too late and, crucially for a scheme to give confidence during Covid, did not cover for cancellation due to an artist having Covid.

“The reinsurance scheme was never right for our industry”

“Festival organisers moved mountains to put on safe, vibrant and successful events last year and are planning for a similarly strong summer of live music in 2023. With ongoing supply chain, energy and cost challenges and pressure on our audience’s disposable income, LIVE would ask that the government reallocate the huge underspend on this scheme to support artists, festivals and the public through targeted funding and a return to 5% VAT.”

IQ has reached out to the Department for Culture, Media and Sport (DCMS) for comment on how the £6 million in premiums will be spent.

The Live Events Reinsurance Scheme, a partnership between the government and the Lloyd’s of London insurance market, was available to purchase alongside standard commercial events insurance for an additional premium.

To be eligible, event organisers had to purchase the relevant cover from participating insurers within the scheme, including Arch, Beazley, Dale, Hiscox and Munich Re.

Premium was set at 5% of the total value of insured costs (plus Insurance Premium Tax) and claims were subject to an excess of 5% of the value of the insured costs or £1,000 (whichever is higher) per policy.

If events had to cancel, organisers will pay a pre-agreed excess and the government and insurers have agreed on a risk share per claim. This would start with the 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.

At the time, culture secretary Oliver Dowden said the scheme would give organisers “the confidence they need to plan for a brighter future”.


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