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Australia and NZ announce first insurance schemes

After more than 18 months of lobbying, Australia and New Zealand have announced country-first insurance schemes for live music.

In Australia, the Victorian government yesterday (14 November) announced plans to launch a 12-month pilot scheme that will insure up to AUS$230 million (€148m) of events.

Subsidised by the government and delivered by the Victorian Managed Insurance Authority (VMIA), the cover will insure concerts, festivals, sporting events and conferences “against cancellation due to public health measures, or where events have reduced capacity due to restrictions”.

Organisers who have taken out the cover will receive 100% of the event’s declared value if the event has to be cancelled for the aforementioned reasons, or 50% of the event’s declared value if the event goes ahead with reduced capacity (or the organiser chooses to cancel the event because of those capacity restrictions).

The insurance will be available in December 2021 and more information can be found here. The premium is rumoured to cost 2% of the declared value of the event.

“For music lovers, it means your favourite festivals will be up and running again, and you’ll be able to book your tickets with confidence – and for industry, you’ll be protected whether your shows goes ahead or not,” Victoria premier Daniel Andrews wrote on Facebook.

The AFA has called the scheme a “game-changer” for the domestic industry but continues to call for a national solution

The Australian Festival Association (AFA) has called the scheme a “game-changer” for the industry but continues to call on other states and the federal government for a national solution.

“The inability to insure against Covid-related cancellations and restrictions has been a huge barrier to festivals getting back to business,” says AFA MD Julia Robinson.

“Health measures such as restrictions on gatherings and lockdowns, while necessary, often come with little or no notice making it difficult when festivals are months and years in the making. Access to a product that allows organisers the certainty to balance risk and safety with commercial reality would address this market failure, and it’s needed across the country.”

In addition to the scheme, the Victorian government has announced a $20m Live Music Restart package to bolster the recovery of the live music sector.

Music venues will benefit from a $8m programme to recruit and train new staff, invest in CovidSafe infrastructure and get more musicians and industry professionals back to work.

While music festivals and events will receive a leg up with $8m to help them recover from the uncertainty and impact of rescheduled and cancelled events due to the pandemic. A further $4m will bring music performances to the CBD and inner-city, complementing a previously announced $5 million for regional and outer-suburban events.


The support comes after Victoria’s sixth lockdown ended last month, with further restrictions on venue and festival capacity limits set to be scrapped in late November once the state has reached its 90% fully vaccinated target.

According to the AFA, “Victorian audiences usually enjoy over 150 music festivals each year, and just a handful have managed to get their gates open since the pandemic started”.

On 30 October, the state hosted Play On Victoria as its first ‘Covid Safe Test Event’, welcoming 4,000 people back to the Sidney Myer Music Bowl to watch Amyl and the Sniffers, Vika and Linda, Baker Boy, King Gizzard and the Lizard Wizard and Grace Cummings.

In New Zealand, the government recently announced that it will cover 90% of “unrecoverable costs” for paid, ticketed events with audiences of more than 5,000 vaccinated people, if organisers are forced to cancel or postpone due to Covid-19 public health measures.

Eligible events must implement the use of vaccine certificates, take place live and in-person, and have been in the market prior to the announcement of the scheme, according to the government’s criteria.

They will also have to be run by New Zealand organisations and not already be funded by other government sources such as the majors events fund or the Ministry of Culture and Heritage.

The NZ government will cover 90% of “unrecoverable costs” for paid, ticketed events with audiences of more than 5,000

It will cover “actual direct costs” and organisers will have to agree to honour eligible costs incurred by suppliers.

The scheme will pay out for any events operating under alert level 2 or higher, or under the new traffic light scheme any events in an area under the new ‘red level’, or in a localised lockdown. At least 50% of the tickets will have had to be sold in order to qualify.

The event date must be scheduled to begin between 17 December 2021 and 3 April 2022 and organisers can only apply once for cancellation and once for postponement for an event.

The scheme, which is now live, has been welcomed by promoters of major events such as Rhythm & Vines (scheduled for December 2021) and Electric Avenue (slated for February 2022) but there are calls for smaller events to be included.

Insurance schemes have already been announced in the UK (£800m), Germany (€2.5bn), Austria (€300m), the Netherlands (€300m), Belgium (€60m), Norway (€34m) Denmark (DKK 500m), France and Estonia (€6m).

 


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UK live sector gives mixed reaction to 2021 budget

The UK’s live music industry has given a mixed response to chancellor Rishi Sunak’s budget, unveiled today (27 October) in the House of Commons.

The chancellor, who upgraded this year’s economic growth forecast from 4% to 6.5%, pledged an additional £850 million in culture sector funding, the majority of which is ring-fenced (including £2m earmarked for a new Beatles attraction on Liverpool Waterfront), alongside temporary business rates relief in England for eligible retail, hospitality, and leisure properties for 2022-23, worth almost £1.7 billion.

The government is also freezing the business rates multiplier in 2022-23 – a tax cut worth £4.6bn over the next five years, and has increased the headline rate of orchestra tax relief.

However, calls to extend the VAT break on tickets sales beyond next March fell on deaf ears, and no improvements to the government’s £800m insurance scheme for live events were forthcoming. In addition, no cash was allocated to help the sector deal with Brexit’s impact on touring, while the absence of the word ‘music’ from the budget document left a sour taste.

“We’re glad to see that live music will receive some benefit from today’s spending review – including tax relief, business rates, and some extension in terms of funding,” says a spokesperson for trade body LIVE (Live music Industry Venues and Entertainment).

We need government to give us the tools to make progress, which were, unfortunately, missing from today’s news

“However, with the word ‘music’ completely absent from today’s announcement, we remain steadfast in our drive to see government pay attention to the key issues we are facing: the impacts of Brexit, the recovery from Covid and the long-term growth of the sector. We need government to give us the tools to make progress, which were, unfortunately, missing from today’s news.”

It remains to be seen whether music will be eligible for the £52m of government funding set aside for museums and “cultural and sporting bodies” next year to support recovery from Covid-19, with an additional £49m allocated for 2024-25.

“We look forward to hearing more detail about some of the measures announced by the chancellor today, in particular the allocation of further Covid-19 recovery funding for the cultural sector,” says Association of Independent Festivals (AIF) CEO Paul Reed. “On the surface, however, it doesn’t go far enough in supporting our truly world-leading festival industry.

“It is clear that the most effective way for the government to support the industry’s recovery into 2022 and beyond would be to extend the VAT reduction on tickets, look closely at a permanent cultural VAT rate, and completely remove festivals based on agricultural land from the business rates system. Unfortunately, none of this was forthcoming today.”

Referencing UK Music’s latest This Is Music report, which revealed the impact of Covid-19 wiped out 69,000 music industry jobs – one in three of the total workforce – the organisation’s CEO, Jamie Njoku-Goodwin, says further action is needed to support the music sector’s post-pandemic recovery.

“It is crucial that we get government support to help us continue to rebuilding and hiring people who went so long without work due to the pandemic,” he says.

“Covid halved music’s economic contribution to the UK economy from almost £6 billion a year to £3.1 billion in 2020. If the government strikes the right note by delivering the support we need, our music industry will come back stronger and bigger than ever.”

The government has missed an opportunity

Setting out a three-point plan to boost the business, Njoku-Goodwin adds: “We are pleased to see the extension of the orchestras tax relief yet the government has missed an opportunity to not take forward further music tax incentives to help boost jobs and economic growth. Similarly, business rate relief for venues is very welcome yet we remain concerned about next April’s VAT hike for live events.  

“Ministers must put turbo-chargers under the efforts to clear away the barriers that are still making it so hard and expensive for musicians and crew to tour easily in the EU. As the domestic music market recovers, the government should also build on recent trade deals by giving more funding and support for music exports.

“As well as music’s huge economic and cultural importance, we also need to see the government fully recognise its huge value to our wellbeing by properly funding music education to help nurture our talent pipeline and provide the stars of the future.”

AIM CEO Paul Pacifico welcomes new measures for venues and hospitality, but stresses the importance of a tax relief scheme for music.

“It’s encouraging to see the government recognise the serious blow Covid dealt to the UK’s music industry in today’s budget, discounting business rates for music and other hospitality venues and for premises improvements and green tech use as well as increasing tax reliefs for orchestras,” he says.

“However, more must be done to support the globally significant independent music sector to ensure a viable future for diverse music, creators and entrepreneurs. One key proposal is a tax relief scheme for music, like those successfully implemented in other creative industries such as film and games. This cost-effective measure could provide our sector with the boost it needs, attracting inward investment and creating a ripple effect across the wider music ecosystem. We urge government to include music in such schemes at the next opportunity.”

There were also contrasting emotions from Night Time Industries Association (NTIA) chief Michael Kill.

“The improved forecasts for growth announced by the chancellor today are good news, and the reopening of the night time economy has been a key part of this better-than-expected bounce back,” says Kill. “We were disappointed that the chancellor chose not to extend the 12.5% rate of VAT on hospitality – this is a missed opportunity, and it will prevent those forecasts from improving further still.”

 


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Concerns grow over UK government insurance scheme

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.

 


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British band crowdfund tour cancellation coverage

British band Marillion are asking their fans to become their insurers for an upcoming UK tour due to a lack of suitable commercial insurance.

The band says they’ve invested more than £150,000 on preparations for the 10-date ‘The Light at The End Of The Tunnel’ outing, but risk losing it all if just one of member is forced to isolate with Covid.

The British government recently launched its long awaited £800 million insurance scheme for live events but it does not cover cancellation in the event of an artist or performer needing to self isolate.

“The tour would be cancelled, but the group would have to honour payments for lighting, trucks, tour buses and crew. This would be on top of not receiving any money from any remaining gigs that had not been played,” says the band.

Their solution is to set up a scheme called Lightsavers where fan pledges would provide a financial buffer, if needed.

“We’re asking our fans to pledge money that will be held in escrow and if it all goes Covid free it will be returned”

“We’re asking our fans to pledge money that will be held in escrow and if it all goes Covid free it will be returned to them at the end of the tour,” explains Lucy Jordache, the band’s manager.

“But if we do have to cancel, then their money will be used to pay the band’s unavoidable expenses.”

Fans who donate, regardless of if the money is needed or not by the band, will receive rewards determined by the size of their financial pledge, such as having their names appear in the tour programme or being given a download of a show from the tour.

There are a number of pledge tiers, ranging from £25 to £250, with the top two tiers already sold out.

This isn’t the first time Marillion has broken new ground using crowdfunding, according to Marillion frontman, Steve Hogarth: “[Fans] have come to our rescue before. Way back in 1997, they helped raise $60,000 to underwrite our entire US tour. It was the first noteworthy instance of online crowdfunding – a world first in fact. We also used the same method to underwrite some of our studio albums.”

Marillion’s tour begins at Hull’s City Hall on 14 November. For a full list of dates and venues go to www.marillion.com/tour.

 


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Prodiss launches cancellation insurance policy

Prodiss has announced a new cancellation insurance policy exclusively for its members to “support the restart of the activity” in the performing arts sector.

The French live music association has negotiated two “tailor-made” insurance solutions with Aon, an insurance broker with expertise in the entertainment sector, and Areas/Maif, French insurers active in the cinema sector.

The first solution is intended to cover the cancellation risks for producers, concert promoters and festival organisers with pre-agreed and competitive rates, including an option to cover the risks of unavailability of persons linked to the Covid-19.

The second solution is designed to cover financial losses for venue operators, also with a competitive pricing approach.

Prodiss represents around 400 members including Accor Arena in Paris, the Bataclan in Paris and Mama

Prodiss tells IQ it will not bear the cost of the contracts but will simply provide its members with competitive contracts. The association would not reveal any other terms at this time.

Prodiss represents around 400 members including Accor Arena in Paris, the Bataclan in Paris, Live Nation France Festivals, Live Nation SAS and Mama.

In February this year, the French government announced a framework along with a €30 million fund which would compensate organisers – both for losses incurred due to the implementation of alternative formats and in the event that festivals are cancelled due to an increasing Covid-19 infection rate.

Insurance schemes have already been announced in the UK (£800m), Germany (€2.5bn), Austria (€300m), the Netherlands (€300m), Belgium (€60m), Norway (€34m) Denmark (DKK 500m) and Estonia (€6m).

 

UK’s £800m government insurance scheme opens

The British government’s highly anticipated £800 million insurance scheme for live events is now open.

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.

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.

Organisers must also have or purchase a standard events cancellation policy (or a policy that includes event cancellation coverage) provided at least in part by a participating insurer.

“This is an important and valuable step in the right direction and provides additional security as we head into autumn and winter”

The indemnification must be purchased at least eight weeks prior to the event taking place. This requirement will not apply for the first 12 weeks of the scheme, which starts today (22 September 2021) and runs until the end of September 2022.

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.

The scheme will not cover loss of revenue due to lower demand for tickets, reduced venue capacity, or self-isolation of staff or performers.

“The live music industry welcomes the introduction of a government-backed insurance scheme, which we have been calling for since the start of the pandemic,” says a spokesperson from Live, (Live music Industry Venues and Entertainment) – which has been pushing for government-guaranteed insurance since at least this time last year.

“While there are still gaps in the cover available, such as for an artist withdrawal due to catching Covid or enforced social distancing, this is an important and valuable step in the right direction and provides additional security as we head into autumn and winter. After a year of almost total shutdown the industry needs a period of time where it can get back on its feet by provide the live experiences that fans are desperate for.”

Full details of the Live Events Reinsurance Scheme are available here.

 


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Australian live industry calls for UK-style insurance

A coalition of Australian live music associations has called on the government to adopt an insurance scheme for live music similar to the £750m government-backed programme announced by the UK last week.

In a joint statement, Live Performance Australia (LPA), Live Entertainment Industry Forum, the Australian Festival Association (AFA) and more warned that it will be a “very sad and quiet” summer without a reinsurance scheme to protect the industry from disruptions and cancellations.

The Australian live music and entertainment sector has long campaigned for a government-backed insurance scheme, especially after the last-minute cancellation of Bluesfest – one of Australia’s biggest and best-known festivals.

However, only the film industry so far has received government reinsurance, through the federal government’s $50m Temporary Interruption Fund, announced in June 2020.

Nations including the UK, Germany, Austria, Netherlands, Belgium, Norway, Denmark and Estonia have announced a financial buffer against future possible lockdowns for the live music and entertainment sectors.

“We’re not looking for a handout, promoters are willing to purchase an insurance product”

LPA’s chief executive, Evelyn Richardson, says: “The UK example shows there is a solution that can be developed in conjunction with industry on commercial terms. We’re not looking for a handout, promoters are willing to purchase an insurance product. A scheme underwritten by government just makes it viable for insurers to put policies in the market.”

AFA GM, Julia Robinson, says: “An insurance scheme will ensure that the $200m in Rise funding together with state and territory initiatives will deliver the maximum benefit for the country. Government don’t want to see these investments go to waste, and neither does the industry.”

In a comment for IQ magazine, Robinson explained warned that a lack of government-backed insurance could also impact business confidence.

Australia’s call for insurance comes after findings from the second I Lost My Gig survey – an initiative of the AFA and the Australian Music Industry Network (AMIN) – revealed that at least 23,000 gigs and events were cancelled during July due to restrictions.

Of the $64m in lost revenue, the results showed that 99% of respondents had no income protection or event cancellation insurance.

 


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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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UK gov confirms 19 July for full reopening

After more than a year of closure, the British live music industry will be able to fully reopen without restrictions from 19 July, it was confirmed today (12 July) by prime minister Boris Johnson.

As reported in IQ last week, from 19 July (the fourth and final stage of the UK government’s roadmap), large events, such as music concerts and sporting events can resume without any limits on attendance or social distancing requirements and attendees will no longer be legally required to wear a face mask.

While the news has been welcomed by many across the business, the country’s rising infection rates in recent days sees the government “urging” nightclubs and large events to use Covid-status certification, a measure which may become mandated if cases continue to increase. For now, “the most at-risk events, such as nightclubs and mass indoor events, will be strongly encouraged to use as a ‘means of entry’ at venues” – but this will not be a legal requirement.

Updated guidance for the live events sector is due to be published tomorrow.

While today’s announcement is a crucial step forward for the £4.6 billion industry, there are many barriers that still remain which will severely impede the recovery of the sector.

The government has said on numerous occasions that it would address the market failure in Covid cancellation insurance once the country moved to Step 4, but plans for any kind of indemnity scheme are yet to be announced.

The live industry is also calling for a cultural exemption to isolation requirements for artists and crews, replaced instead by frequent testing. This would save productions from collapsing due to the need to isolate whole casts or crew when just one person in a bubble contracts Covid. From 16 August, fully vaccinated individuals will be exempt from needing to self isolate as part of the country’s Test & Trace programme.

“If government really wants us to get back our feet, they need to make live events financially viable”

Finally, the sector is calling for an exemption that will enable international talent to perform on UK stages without the period of quarantine – which many are unable to do due to other commitments. The UK’s professional sporting sector has already obtained this exemption, allowing teams to come from around Europe to the UK to play in the European Championship without quarantining.

The UK live sector has welcomed today’s confirmation but echoes these unresolved concerns.

Paul Reed, CEO of the Association of Independent Festivals (AIF), says: “We welcome the Health Secretary’s confirmation of progressing to Step 4 of the lockdown roadmap. Government has repeatedly stated that once we are at this stage, it will examine if insurance is still an issue for events and intervene if necessary. We are now one week away from this date and the sector needs a long-overdue resolution to this problem.

“AIF is also working with the relevant government departments on the publication of guidance to ensure that festivals can reopen safely this summer, and organisers and local authorities alike can have confidence in their decision making and measures introduced – including Covid certification where considered appropriate. Ensuring the safety of audiences and risk mitigation has always been central to what festival organisers do each year and it will continue to be more so than ever as we begin to emerge from the pandemic.”

Greg Parmley, CEO of LIVE, says: “Today is a fantastic day for live music – our members cannot wait to get back out there and put on the events safely that our fans have been missing this past year.

“While we have been waiting for this moment for the past year, commercial insurance is still not available – meaning organisers are faced with the prospect of huge financial losses should any restrictions need to change. If government really wants us to get back our feet, they need to make live events financially viable, provide the insurance scheme they have promised, and give the industry the confidence to invest for the long term.”

“In order to save the last few events of the 2021 season we must have the necessary guidance immediately”

Steve Heap, general secretary of The Association of Festival Organisers, says: “The Association of Festival Organisers is delighted to hear the Secretary of State tell the house that the government have no plans to start charging for lateral Flow Tests. Whilst we are of course also very pleased the government will take us to Step 4 on July 19th. However in order to save the last few events of the 2021 season we must have the necessary guidance immediately as festivals are trying to meet the required regulations at very short notice.”

David Keighley, Chair of the Production Services Association, says: “It is great news to hear that finally the government has confirmed the easing of restrictions on the 19th July. The success of the vaccination roll out has been the key factor in making the move to step 4 possible. Ironically we see very large increases in Covid cases at this time but if the vaccines mean the number of serious cases and hospitalisations remain relatively low, then it is right to open up our economy. Let’s all hope this remains the case in the coming months. There is still a level of uncertainty and we all need to be cautious throughout the summer and particularly moving into autumn.”

Mark Davyd, CEO of Music Venue Trust, says: “Music Venue Trust warmly welcomes the decision to permit grassroots music venues in England to open at full capacity from 19 July. For the last 12 months, we have been working tirelessly alongside venue operators to identify ways in which they can Reopen Every Venue Safely. That work remains at the forefront of everyone’s minds, but today we want to reach out to live music fans and send them a simple message: It’s finally time to Revive Live.

“Please help your local venue in England to provide safe events by thinking about your personal responsibility, the things you can do to ensure that as well as keeping yourself safe you are also doing everything you can to support the safety of others. We have all been desperately seeking the opportunity to Revive Live Music, and to show that we can do that safely. Let’s take this opportunity and demonstrate that we are a community that cares about each other.”

 


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Government-backed insurance won’t be a silver bullet

With the government announcement yesterday, it seems England will be “back to normal” in two weeks’ time. Of course that’s great news, although we must also respect others’ doubts – particularly from the medical side – that the overnight opening may be too sudden and liberal.

This inevitably opens up the long-standing question as to whether, or when, the UK government will provide a scheme to protect event organisers against further closures or venue capacities. (Note I do not use the word “insurance” as governments are not insurers.) It would be a scheme to provide some protection or – let’s be totally transparent and controversial – could be seen as a gamble with taxpayers’ money.

The call for UK government to follow other countries, or the UK’s film/TV scheme, has been loud and consistent, but many reports over the months have possibly, in my humble opinion, been misleading.

Film/TV was a far easier matter as the numbers of shoots are massively smaller and they are mainly in closed sets with no audience, so the risk is quite different.

While several European governments have confirmed they will look into protection, only a handful, maybe only three or four, actually have a facility in operation right now. Most others are yet to declare when or how a scheme would operate, and hence unlikely to apply to the 2021 summer.

It also has to be remembered that any facility provided by a government surely has to apply to all events in their country

They also come with limitations and conditions, such as a monetary cap on any one event, and some only covering a percentage of the costs (most common seems to be 80%) or a sliding scale. Would those limitations be sufficient for a festival, tour or event to proceed, or is it still too large a financial risk? The cost – or to use an insurance term, premium – involved has also yet to be considered and how much effect that may have on a budget, particularly for an event that is already on sale.

The talk has been about a scheme to protect event organisers/promoters, so where does the artist stand in this? Would promoters cover their fee as part of their show costs and, in which case, would any cap per event be sufficient – as surely artist fees are the major part of an event budget? Traditionally, many emerging artists have lost money while touring, particularly if it is restricted to a small number of shows within one country, so even if their comparatively smaller fee is paid, who covers the shortfall?

The new Dutch scheme apparently requires proof that an insurance policy including communicable disease cover was in force for the same event in 2019 – thus excluding new events or any that simply did not insure (including Covid-19) in 2019, and I wonder if similar rules were applied in the UK how many would fall into those categories.

It also has to be remembered that any facility provided by a government surely has to apply to all events in their country (it would still not protect overseas work) requiring an audience or spectators – not purely music – so there massive considerations to factor. This includes sports, theatre, conferences, exhibitions, charity events, carnivals, fairs and fêtes, among others, potentially all carrying different reasons for cancellation or audience reduction.

Any such scheme takes considerable planning, monitoring and collection of information, and those involved with lobbying the UK government have already stated it may take several weeks from agreement to implementation.

In most cases it has never been insurers’ intention to cover a global pandemic such as Covid-19

My final point – made as a broker and not an insurer – is the constant referral to “insurance market failure”. The principle of insurance is to protect against the unknown or unforeseen – so, for all insurers’ possible faults, is it really fair to say keep saying it is a failure for them to accept new policies for a situation that has affected every single person in the world, and will be with us for some time to come? On cancellation insurance alone, it is fact that in the last year UK insurers have already paid the equivalent of around 20 years’ premium in claims.

Every insurance policy comes with terms and conditions. In most cases it has never been insurers’ intention to cover a global pandemic such as Covid-19, purely as they have no control of their total financial exposure at any one time. Cyber risks are a current cause for concern for similar reasons. If they provide carte-blanche cover for such situations they would simply not have sufficient funds to survive and pay.

However some policyholders, largely for major outdoor events, with Wimbledon tennis being an openly stated UK example, paid extra premium to include communicable disease cover. A few insurers paid Covid-19 losses seemingly on a policy wording technicality but the majority did not, and perhaps some statements on how many were paid are misleading when they do not indicate how many were not paid.

We all hope the entire live events industry, whatever genre, makes a swift and full return. But I hope some of my points may cause consideration as to whether any government scheme will provide the immediate and 100% comprehensive protection expected for this summer and beyond.

 


Martin Goebbels is head of music and touring for Miller.