Government-backed insurance scheme to launch in UK
Following months of campaigning by live music industry bodies, the British government today (5 August) announced a £750 million insurance scheme for live events.
The Live Events Reinsurance Scheme, a partnership between the government and the Lloyd’s of London insurance market, will see the former acting as a reinsurer, guaranteeing policies issued by commercial insurers to live events that are open to the general public, including festivals and business events. The scheme will cover costs incurred in the event of cancellation due to the event being legally unable to happen due to government restrictions.
Event organisers will be able to purchase the government-backed cover, which will sit alongside standard commercial events insurance, from next month, with a number of prominent Lloyd’s insurers, including Arch, Beazley, Dale, Hiscox and Munich Re, having pledged their support for the scheme.
Industry reaction to the scheme is broadly positive. “This vital intervention from the UK Government offers certainty to artists, concert and festival promoters in the live entertainment market,” says Denis Desmond, chairman of Live Nation UK and Ireland. “This is very welcome news and will help keep the sector and its employees working.”
A statement from umbrella body LIVE (Live music Industry Venues and Entertainment) – which has been pushing for government-guaranteed insurance since at least this time last year – says: “We welcome the announcement of a government-backed insurance scheme, which we have been calling for since the start of the pandemic. We look forward to working together over the coming weeks to determine the final shape of the policy and to ensure it can support the full return of the sector in the face of the most likely impacts of Covid.”
“The sector has been calling out for government to act for over a year and we now have something tangible”
“This is welcome news,” adds Phil Bowdery, chairman of the Concert Promoters Association. “The sector has been calling out for government to act for over a year and we now have something tangible. While the new scheme won’t cover all our risk, this intervention will help protect the industry that we all know and love.”
The scheme is understood to charged to event organisers at a 5% premium. But while the scheme covers cancellation due to a national or local lockdown, it does not cover cancellation due to operational restrictions such as the reintroduction of social distancing at shows, or cancellation in the event of a headline artist contracting the disease.
Paul Reed, CEO of the Association of Independent Festivals (AIF), has welcomed the news but also expressed concern regarding the scheme’s scope. “AIF has campaigned for a government-backed insurance scheme for festivals for over a year… 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.
“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.”
The Live Events Reinsurance Scheme will run from September 2021 to the end of September 2022. If events do have to cancel, organisers will pay a pre-agreed excess and the government and insurers have an agreed a risk share per claim. This starts with 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.
“The scheme doesn’t cover a festival needing to reduce capacity or cancel due to social distancing being reintroduced”
Parklife Festival’s Sacha Lord adds: “The events sector has been in dire straits throughout this crisis and this move will not only save hundreds of upcoming events, but will support the thousands of freelancers behind the scenes who depend on the sector for their own livelihoods.”
Rishi Sunak, the UK chancellor of the exchequer, comments: “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 culture secretary, Oliver Dowden, adds: “We’ve been here for live events throughout the pandemic with billions of pounds of rescue funding. Today is an important next step as we develop live events insurance to give them the confidence they need to plan for a brighter future.
“Our events industries are not just vital for the economy and jobs; they put Britain on the map and, thanks to this extra support, will get people back to the experiences that make life worth living.”
“Lloyd’s has stood by its customers throughout the pandemic, and we are pleased to strengthen those efforts by partnering with the UK government to deliver the Live Events Reinsurance Scheme,” says Lloyd’s’ John Neal. “This unique and critical cover will enable live events to resume around the country with confidence as society begins to reopen and begin its recovery, and we are proud to be playing our part.”
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Germany finally launches €2.5bn fund for culture
The federal cabinet of the German government has finally launched a fund of €2.5 billion dedicated to supporting cultural events. Details of the fund, first announced last December, were spelt out during a joint press conference held yesterday (26 May) by Olaf Scholz, minister of finance, and Monika Grütters, minister of state for culture and media.
Divided in two supporting strands, the special fund should enable concerts, theatre performances, cinema shows and other cultural events to start up again. At €1.9bn, the biggest tranche is dedicated to compensating financial losses for live events held under capacity in order to meet Covid-19 restrictions. A further €600 million is allocated for an insurance fund to cover losses incurred by the cancellation of events and shows which are called off due to the pandemic.
Scholz, in his position as minister of finance, is the main originator of the fund. Politically this is a notable move, as the development of such a tailor-made measure would usually be the responsibility of either the state ministry for culture or the ministry of economic affairs.
In fact, political manoeuvring behind the scenes is one of the reasons why it took so long for the fund to be officially launched. Finally, after the intervention of the Federal Chancellery, it is Monika Grütters who now takes the lead on a steering committee for the fund. The administration and financial handling of the fund has been transferred towards the culture ministries of the German states.
While the main terms and conditions of the core elements of the fund are already defined and agreed, there are some minor details still under development.
From September onwards, promoters of events with more than 2,000 visitors are able to access the insurance element of the special fund
The biggest chunk is dedicated to providing economic aid for promoters in the cultural sector. This tool is expected to be launched from July onwards and last until the end of the year. Starting first with events up to a capacity of 500 people, promoters can apply to receive compensation for unsold tickets when the number of attendees is reduced by at least 20% due to pandemic restrictions. For each ticket sold, the organisers receive the same ticket price again as a subsidy.
From the beginning of August, promoters of events up to 2,000 people are also eligible to benefit from the fund. In the case of very strict hygiene requirements and a limit on the number of participants up to 25% of maximum capacity, the subsidy may increase to the amount of twice the ticket revenue. However, the subsidy is limited to €100,000 per event.
From September onwards, promoters of events with more than 2,000 visitors are able to access the insurance element of the special fund. In the case of a cancellation, a reduction in the number of participants, or a postponement of the show due to the pandemic, the cancellation fund will cover a maximum of 80% of the cancellation costs incurred. The maximum amount of compensation is €8m per event.
Promoters are asked to register their events upfront on a central online portal, which will be created operated by official sources in Hamburg. A central help desk for information and consultation will be located in North Rhine-Westphalia.
Closely involved in previous consultations regarding the development of the fund have been, among others, Dr Carsten Brosda, senator for culture in Hamburg; Wolfgang Schmidt, state secretary in the ministry of finance; Alexander Schulz, managing director of Reeperbahn Festival; and Stephan Thanscheidt, CEO of FKP Scorpio and board member of the German promoters’ association, BDKV.
This article forms part of IQ’s Covid-19 resource centre – a knowledge hub of essential guidance and updating resources for uncertain times.
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Bluesfest announces rescheduled 2021 dates
Byron Bay Bluesfest is now slated to take place in October with a four-day format, after the original 2021 event was cancelled at the eleventh hour.
The festival had been set to take place between 31 March to 5 April 2021 but less than 24 hours before it was set to open, the New South Wales government called it off due to a new Covid case in Byron Bay.
The rescheduled event will take place at Byron Events Farm across four days instead of five (1–4 October 2021), though the organisers have said that current five-day ticket holders will receive some ‘special’ news alongside the lineup announcement.
This Wednesday (19 April), the festival will announce the full line-up which organisers say ‘will be worth the wait’.
“Trust us when we say the wait will have all been worth it…,” reads a post on Byron Bay Bluesfest’s Facebook. “We’ve been adding more of Australia’s absolute best talent – a way of saying thank you to all of you who have supported us during this time.”
“Trust us when we say the wait will have all been worth it”
The April 2021 lineup included the likes of Jimmy Barnes, Tash Sultana and The Teskey Brothers. It’s unclear whether any of the acts from the original lineup will appear at the October event.
Season tickets will go on sale after the line-up is revealed, followed by three-day and one-day tickets.
The cancellation of the April Bluesfest event was touted as a “watershed moment” by the Australian music industry, which had been lobbying for a business interruption fund that would help live events redeem their costs in the event of an eleventh-hour cancellation.
The Australian Festivals Association’s Julia Robinson told IQ that such a fund is essential to boost business confidence. Read her comment here.
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Bluesfest forced to cancel at the eleventh hour
Byron Bay Bluesfest 2021 has been cancelled by a public health order, a mere 24 hours before doors were due to open to the public.
The New South Wales (NSW) government announced on Wednesday (30 March) that Bluesfest would not be permitted to go ahead on its scheduled dates, Thursday 31 March to Monday 5 April, due to a new Covid case in Byron Bay.
Bluesfest confirmed the cancellation in a statement published late afternoon on 31 March. “We are heartbroken that Covid-19 has spread into our local community,” it read. “We are getting the message out as quickly as possible so that those traveling to the event can make alternate arrangements.”
Read the full Bluesfest statement via our website: www.bluesfest.com.au/bluesfest-is-cancelled-for-two-years-in-a-row
In a statement, Minister Hazzard said: “While the cancellation of Bluesfest is disappointing for music lovers and the local community, I hope that ticket holders would support Bluesfest and hold on to their tickets as I understand Bluesfest will be working on a new date as soon as possible.”
Under an NSW Health-approved Covid-19 safety plan, Bluesfest 2021 was set to operate at approximately 50% of normal capacity and production, hosting around 16,500 people on each of its five days, with an all-Australian line-up.
It’s just been announced that @BluesfestByron has been cancelled. While this is such huge blow for Aussie music, the health and well-being of this country has to come first. Thanks to the team at Bluesfest for doing the best they could in preparation. pic.twitter.com/4fpJBzqXAh
— Jimmy Barnes (@JimmyBarnes) March 31, 2021
The cancellation marks the second time the festival has been called off due to the coronavirus.
The last-minute cancellation of Bluesfest has prompted fresh calls for a government insurance scheme that would help live events redeem their costs in the event of an eleventh-hour cancellation.
“Govt has a Covid insurance system for the film industry. Music needs one too. Urgently”
Bluesfest’s Peter Noble had called for such a fund at the beginning of the year. A business interruption fund, he wrote on Facebook, would “incentivise event presenters to put on events and be protected in not going to the wall, should an out break of Covid shut down their businesses at short notice and protect artists, crew and suppliers [to] get paid should that occur”.
“The federal government did it more than six months ago for the film industry to get them back to making movies. Why are we still waiting?” he wrote.
Shadow Arts Minister Tony Burke has also called for a “Covid insurance system” for live music. “The music industry is full of viable profitable businesses unable to function because of public health,” he wrote on Twitter. “Govt has a Covid insurance system for the film industry. Music needs one too. Urgently.”
Finland’s guarantee fund ‘doesn’t meet industry’s needs’
The Finnish government has proposed an event guarantee fund that would “put players in the sector in a highly unequal position”, according to the Event Industry Association (Tapahtumateollisuus).
The proposal, prepared by the Finnish Ministry of Employment and the Economy and submitted for comments on Monday (29 March), has been designed to reimburse a portion of the production costs for large-scale events and festivals should they be cancelled or restricted due to official regulations.
However, the association says the proposed guarantee scheme “unjustifiably” excludes a large part of the event industry, such as year-round events, professional sports and theatre.
In addition, the proposed guarantee support would only cover events during the summer season, up until 30 September. The association says the time limit does not take into account the time span of planning provisions in the event industry, nor would it cover “one of the most active operating periods in the industry”.
“In the proposed form, guarantee support would completely exclude a large part of the events industry”
The association adds that summer events have a “rather narrow employment impact on the industry as a whole”.
“It is good that the need for transaction support has finally been identified. However, it must also act on its purpose. Therefore, the support model must be corrected before the decision of parliament, because in the proposed form, guarantee support would completely exclude a large part of the events industry,” says Pekka Timonen, chairman of the Event Industry Association.
“A guarantee covering only the summer should have been provided for in January at the latest. We also require security from the guarantee to secure the events of the autumn season. Many trade fairs and corporate events as well as entertainment and seminar events are held in the autumn and early winter. They must be covered by comprehensive guarantee support,” adds Timonen.
In the northern hemisphere, other insurance schemes have been announced in Germany (€2.5bn), Austria (€300m), the Netherlands (€300m), Belgium (€60m), Norway (€34m) Denmark (DKK 500m) and Estonia (€6m).
Swiss gov to contribute to event cancellation scheme
The Swiss federal government will now subsidise event cancellation insurance for major events, according to a newly amended article in its Covid 19 Act.
The updated legislation says that the government will contribute to the uncovered costs of public events which have ‘cross-cantonal importance’ (such as concerts or festivals) between 1 June 2021 and 30 April 2022.
Under the new act, organisers of major events who have a cantonal permit can claim back costs that aren’t covered by public support measures, insurance or cancellation agreements, if their event is cancelled or postponed due to government-enforced Coroanvirus restrictions.
It is understood that each of the 26 Swiss cantons will continue to pay 50% of the costs of cancelled events in their region, as they have done so far in Switzerland’s other compensation schemes. The Swiss government has said it will only contribute, at most, the same amount as the cantons.
The prerequisites of the scheme have rendered criticism from two of Switzerland’s event associations – the Swiss Music Promoters Association (SMPA) and the association of trade fair organisers and suppliers, Expo Event – which have long been lobbying for a protective umbrella.
“The fear is that we will have 26 different solutions and speeds”
SMPA’s managing director, Stefan Breitenmoser, doubts whether organisers of major events will be able to secure cantonal permits far enough in advance of their events: “In reality, permits are only issued relatively shortly before the event during normal operations.”
Expo Event president, Christoph Kamber, is concerned that the devolvement of power to the cantons will result in a fractured approach to the scheme: “The fear is that we will have 26 different solutions and speeds.”
“We call on the Council of States to work in the cantons to ensure that the protective umbrella does not degenerate into a toothless paper tiger. Picking up the cantons will delay the introduction of the protective umbrella and there is a great risk that it will come too late for many events.”
Major Swiss festivals including Paléo Festival Nyon, Greenfield Festival and Rock the Ring have already cancelled their 2021 editions, citing “a lack of planning security for large events”.
Kamber has also pointed out the lack of support for events that can be carried out to a limited extent, “though it can ultimately cost the state treasury less than a cancellation or postponement”.
The Expo president has called for clarification on the support, as well as information on cantonal support measures for regional and local events.
Danish gov unveils DKK 500m safety net for events
The Danish government has announced a DKK 500 million (€67.2m) safety net for festivals and major events, allowing organisers to plan for this summer without the financial risk posed by a potential Covid outbreak.
The safety net will cover organisers of recurring events with at least 350 participants (such as music festivals, super league matches, conferences and markets), as well as events that were planned before 6 March 2020, but will not include new events created during the pandemic.
The scheme is a ‘continuation and simplification’ of the existing organiser scheme and will cover eligible events between 1 May and 30 September 2021 in the event that the Covid-19 situation results in the cancellation, postponement or significant changes to an event.
The full agreement, which must be approved by the European Commission, includes a ‘compensation ladder’ which provides organisers with an estimation of what they can expect to receive in compensation and deliver on to suppliers.
“Festival organisers can continue to plan with peace of mind”
In addition to the safety net, the agreement also includes an emergency pool of DKK 30m for bankruptcy-threatened large charitable music festivals, which each year distribute their profits to charitable causes.
“We all hope for a summer where the infection situation allows us to gather for festivals again,” says minister for culture, Joy Mogensen. “Until then, the festival organisers can continue to plan soundly with peace of mind. With the agreement, we ensure that festivals will be compensated if they have to cancel due to restrictions.”
Esben Marcher, head of Denmark’s live music association, Dansk Live, says: “It is positive that there is now a financial safety net for the festivals, so that the organisers can complete the preparation of this summer’s festivals. We will, of course, follow the implementation of the agreement closely. However, we still need clarification on whether there will be restrictions this summer, and which scenarios we must plan based on.”
Last week, Denmark’s ‘restart team’ submitted a catalogue of recommendations on the reopening of the cultural and sports sectors to the ministry of culture for government approval.
Denmark is the latest market to announce an event cancellation fund, taking note from Germany’s €2.5bn pot, Austria’s €300m ‘protective umbrella’, the Netherlands’ €300m fund, Belgium’s €60m festival cancellation pot and Norway’s €34m festival safety net.
Danish culture minister to propose festival insurance
Minister Joy Mogensen says the scheme would be similar to the one implemented by the government last summer, but this time would “extend far into the summer and be approved in the EU”.
Last year’s government compensation scheme covered organisers of events with more than 1,000 participants, or 500 participants if the event is targeted at special risk groups, between the months of March and June.
Mogensen previously mentioned a deadline date of 1 March to give festival organisers a verdict on whether the summer season could go ahead in some capacity, but now says she cannot confirm a date until she gets approval from the Danish government.
“We will start the technical briefing of the culture rapporteurs this afternoon [25 February],” Mogensen told Politiken. “Then we will continue to have a dialogue with the European Commission, so that we can reach our goals quickly.”
Mogensen says that the scheme would be adapted to ensure that, this time, subcontractors would not be left in the lurch
Mogensen says that the scheme would be adapted to ensure that, this time, subcontractors would not be left in the lurch if restrictions meant the 2021 festival season is cancelled.
Last year, Denmark’s Roskilde Festival, Live Nation Denmark, Smukfest, Tinderbox and NorthSide penned an open letter appealing for political support for the restart of festivals this summer and outlining the consequences if the events of 2021 are cancelled.
In the months since, the ministry for culture has assembled a ‘restart team’, which has been provided with DKK 50 million to develop new event formats that could be safely implemented in the spring.
This week, outdoor cultural institutions nationwide were permitted to reopen with a capacity limit of 25 people, though the government’s group of health experts has recommended a full reopening, facilitated by Covid-19 testing and health passports.
Earlier this month, Denmark’s acting minister of finance, Morten Bødskov, announced in a press conference that digital Coronavirus passports will be ready for use in three to four months but will initially apply only to travel.
Norway announces NOK 350m festival cancellation pot
The Norwegian government is committing NOK 350 million (€34m) to a cancellation insurance fund for festivals, allowing organisers to plan for this summer without the financial risk posed by a potential Covid outbreak.
Norway’s minister of culture, Abid Raja, announced in a press conference last week that the financial safety net will help organisers plan for July and August.
“[The insurance pot is] to create predictability now, so that the industry can start planning different scenarios and be confident that if things go wrong, we will stand up for them,” said Raja during the conference.
“We must plan for all scenarios so that the festival industry and the summer industry will have security that there is a minimum of safety nets here.
“As of now, it is impossible to predict whether it will be possible to have 200, 1,000 or 5,000 people at events this summer. We do not know,” he adds.
“The industry can start planning different scenarios and be confident that if things go wrong, we will stand up for them”
Gøran Aamodt, head of The Park Festival in Bodø, told NRK: “This is an extremely important signal. It allows us all to dare to breathe with our stomachs again. And not least, as an industry we can plan as normal. We are very pleased with such an early signal.”
Like the majority of European festival markets, Norway was forced to forego its summer season after the government extended its ban on major live events until 1 September.
Major Norwegian festivals including Live Nation-owned festivals Bergenfest and Tons of Rock, as well as Superstruct’s Øya Festival, were called off.
Meanwhile, other major festival markets in the northern hemisphere – including the UK, Switzerland, Denmark and France – are urgently encouraging respective governments to do the same as time runs out until the summer season.
Government-backed insurance funds will be explored at ILMC during Insurance: The Big Update, while lessons that can be learned from 2020’s lost festival summer will be discussed during Festival Forum: Reboot & Reset.
Dutch gov announces €300m event cancellation fund
The Dutch government is reserving at least €300 million for a cancellation fund to allow event organisers to plan for the second half of 2021 without the financial risk posed by a potential Covid outbreak.
The guarantee fund – similar to those announced in Germany, Austria and Switzerland – is intended for music festivals, business fairs and sports competitions that attract a minimum of 3,000 visitors and take place in Q3 and Q4 of this year.
The cabinet is considering a 1 July commencement date for the fund as Dutch minister for culture, Ingrid Van Engelshoven, says that it is not “reasonable” to expect that “masses can stand close together on a field” earlier than that.
It is unclear what this will mean for festivals that are scheduled to take place in May and June including Best Kept Secret, Pinkpop, Awakenings and Defqon. 1.
“[This fund] is a dot on the horizon for festival organizers,” says van Engelshoven. “They can fall back on the guarantee fund in which at least €300m has been reserved. The event industry has long come to a standstill due to Corona. Guarantee is needed to get it back on track.”
“The event industry has long come to a standstill due to Corona. Guarantee is needed to get it back on track”
The fund was announced on Thursday (21 January) after almost the entire House of Representatives voted in favour of the scheme the previous day. Along with the fund, the government has announced a new package of economic support measures totalling €7.6 bn which will be rolled out during Q1 and Q2 of 2021.
The government also confirmed this week that the ‘Back to Live’ test shows, which were postponed from January after the Dutch government extended lockdown, will be permitted to go ahead in February.
The Dutch government is the latest to approve a much sought-after event cancellation fund. In September, Switzerland became the first European country to introduce an insurance scheme, totalling CHF 268m, which compensates event organisers a maximum of 80% of the financial loss if their event has been cancelled.