UK gov-backed insurance scheme paid out only once
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”.
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.
Take Cover: The changing landscape of insurance
If these “unprecedented times” have proved anything, it’s that a robust insurance plan can be the difference between survival and extinction for many in the live music business. And while the industry is slowly but surely beginning to resemble its former self, the scars of the pandemic run deep.
“We had huge claims at the start of the pandemic, which led to a lot of change within the underwriting market,” says Tim Thornhill of specialist brokers Tysers Insurance. “Some insurers increased their rates, and many stepped out and no longer wanted to provide cover for any type of event cancellation or non-appearance insurance at all. We’ve seen that ongoing since live music has returned.”
Indeed, salvation came at a cost: insurers globally reportedly lost more than £8bn in the first year of Covid-19 – £2.6bn of which was incurred by Lloyds of London alone. A number of stopgap government schemes, meanwhile, were introduced around the globe in a bid to get the battered touring scene back on its feet, to varying degrees of success.
As a result, 2023’s new normal is that insurance firms are still currently unwilling to insure against coronavirus.
“We had huge claims at the start of the pandemic, which led to a lot of change within the underwriting market”
“We have seen more enquiries than ever,” says Steven Howell of Media & Music Insurance Brokers (MIB). “Some contingency underwriters have closed for business following large losses, some new markets have entered the space, and all underwriters have amended the policy wordings to exclude Covid and other communicable diseases.”
Furthermore, Howell argues it is no longer a question of how many insurers will offer cover but more of how much cover they will offer.
“Pre-pandemic, many underwriters were happy to take the whole risk or a major percentage of the risk for a large festival or tour, they now wish to limit their exposure for any one event by taking a smaller percentage of the risk,” he continues. “This means we need to source two, three, or four more markets to cover the same event as underwriters seek to spread their risk.”
“Due to losses in the billions, the landscape has changed,” says Charlie Connell, executive director of entertainment for international insurance group Howden. “Insurers are less willing to take on such high levels of exposure and so the capacity for larger events and tours has diminished greatly.
“The breadth of cover has also decreased with insurers extremely concerned of another systemic event causing great losses in the market, which in turn could affect people’s jobs, and even to the point where music insurance being available at all could be in jeopardy.”
“Due to losses in the billions, the landscape has changed”
In Germany, Christian Raith, managing director at erpam GmbH, says, “From our point of view, there are currently few challenges in getting risks covered in the market. Despite the large losses caused by the pandemic, there is sufficient capacity in the German market. Of course, there is still the exclusion of pandemics or Covid, but I think every event organiser understands that.”
Martin Goebbels of Miller Insurance suggests rising premiums could tempt some companies back into the market. However, he points out that prices were already on the increase pre-2020 since “losses on cancellation insurance had been huge for a number of years.”
“Prices are still less than probably 20 years ago and an awful lot less than 10 or 15 years before that, so they’re not at an all-time high,” he says. “But obviously they are nudging back up because of a number of factors, not principally Covid – the weather situation, globally, is having quite an impact on insurers. And not just bad weather but actually excessively hot weather in recent times.”
“It’s certainly tougher than it was three years ago, mainly due to the limited [number] of insurers. We hope some come back in, but they’ll only come back in if the price is right.”
“The weather situation, globally, is having quite an impact on insurers”
Raith comments, “We are already noticing that the market is very soft again and we have been able to give premiums to customers in isolated cases that are not far from the old premiums. This is due to the large capacity, of course, but also to the fact that we have never had so many insurers on the market in over 30 years as we do today. But many big players are also getting on a bit, so premiums are a little higher there, but that remains understandable.”
Elsewhere in Germany, independent insurance broker vR&S has specialised teams who consult promoters, artists, and venues around the globe in terms of insurance and risk management.
“In 2020, the insurers paid out a huge [number] of claims on policies where Covid was deemed to be insured, so as everyone can imagine, the whole market was very negative in terms of premium income related to the losses paid out,” says the Hamburg-headquartered firm’s CEO Johannes v. Rauchhaupt.
“On the other hand, only a [small] number of risks were placed during this time, so insurers had nearly zero income. Generally speaking, after the pandemic, insurers had to gain more income from their business, so they were forced to generally increase rates.”
“There have been two major changes since Covid: one is increased premium level, the second is less capacity. Insurers are more willing to underwrite vanilla risks than the shows [that] tend to come with a higher risk.”
“There have been two major changes since Covid: one is increased premium level, the second is less capacity”
Nevertheless, vR&S live entertainment broker Julian Wagner predicts that – as has been seen with terrorism cover in the past – stances on providing insurance for Covid will soften over time.
“After the pandemic outbreak, insurers reacted very quickly to the situation and revised the wordings or the terms and conditions – not only the exclusion for pandemics but also for cyber risks or similar avoidable major loss risks,” says Wagner. “We saw this after 9/11 as well. Terrorism was a risk that was considered to be ‘never insurable again.’ But there, too, after a reasonable period of time, insurers rowed back.”
“At the beginning of the pandemic, everyone was very afraid of the situation, and now we see on the market that the first insurers are slowly taking over attempts to insure corona risks again. In the future – and I am sure of this – Corona risks [will be able to] be insured normally, perhaps with a surcharge.”
“In the future – and I am sure of this – Corona risks will be insured normally”
As is well documented, the post-pandemic return to touring has been blighted by a slew of tour cancellations for one reason or another.
“Anything can happen to a tour,” reflects Tysers’ Thornhill. “They can be cancelled because of illness to the artist, adverse weather, strikes, [which are] captured within all risk policies, with exclusions for things like cyber and communicable disease.”
Howden’s Connell notes that the business has experienced “sizeable losses in the non-appearance and cancellation space” due to artist illness or adverse weather, which he says highlights “the validity of the insurance products available beyond Covid.”
Miller’s Goebbels believes the rise in cancellations has acted as a further deterrent for insurers getting back into live music.
“They don’t see it as an attractive proposition,” he contends. “Long gone are the days where insurers saw the music business as glittery fun; they are a business like everybody else, and they’ve got to make profits. If there’s suddenly an increase in show cancellations for whatever reason, they have to look at it very carefully.”
“Long gone are the days where insurers saw the music business as glittery fun”
“In some cases, insurers are applying deductibles to tours, a one-show deductible would mean that in the event of an artist missing one show there would be no cover,” reports MIB’s Howell. “In the event they miss two or more shows, then the claim on the policy would be from the second missed show onwards. In all cases, insurers are asking for more information upfront in regard to previous cancellations, illnesses, and pre-existing conditions.”
Additional complications arise from the age of some of the artists hitting the road, particularly those in the autumn of their career.
“Many artists are still touring into their 70s and even 80s these days, and that’s a tricky one for insurers,” says Goebbels. “When you say, ‘I’ve got a band of 75 year olds going on a world tour for nine months,’ insurers are going to want to know an awful lot of medical information. Sometimes, the band push back and say, ‘It’s confidential,’ and insurers’ attitude is, ‘If you don’t want to tell us, then you can’t expect us to insure it.’”
“Not only age increases the likelihood of a claim, we have [also] seen many cancellations [that] are caused by mental illnesses in the last year,” offers Rauchhaupt. “Moreover, climate change obviously leads to more unforeseeable weather conditions across the world. Adverse weather remains the biggest risk for outdoor events.”
“Not only age increases the likelihood of a claim, we have [also] seen many cancellations [that] are caused by mental illnesses”
Rauchhaupt advises that it’s worth having a good broker by your side to make sure the risks you want to insure against are fully covered in the policy being taken out. “You wouldn’t go to a judge without a lawyer or wouldn’t pay your taxes without a good consultant – and the same applies to insurance.” he insists.
“We’d always encourage them to speak to us as early as possible, particularly on things like rates,” says Thornhill. “If you get in there early, then often it can be cheap. Also, it’s possible to declare your shows on a minimum deposit basis. Any adjustments can be made for activity later in the year.”
“It saves the time and hassle of dealing with financial administration when their time is better spent in the run up to an event in delivering the best service to the participants and the gig-goers. If they get the admin done early, it could be financially beneficial, but it’s certainly going to be time beneficial.”
“Speak to a specialist broker as early as possible to allow time to approach a number of markets and obtain the best terms,” concurs Connell. “Look at the option of an annual policy rather than one-off event policies, as this may be more economical. Check the contracts and only insure for the risks that you are exposed to. For instance, if your contract says that you do not pay the artist if they fail to perform, then you may not need to include the artist’s guarantee in your insured costs.”
“You wouldn’t go to a judge without a lawyer or wouldn’t pay your taxes without a good consultant – and the same applies to insurance”
Of all the misconceptions about the insurance industry, there is one issue in particular that everyone is keen to set straight.
“One general thing I’ve heard a lot in the last years is that insurers aren’t paying out when it comes to the moment where they need to,” stresses Rauchhaupt. “I think Covid showed that this is not true. We have handled more than 1,000 cancellations in 2020, and none of them went to court.”
“Most insurers are happy to pay claims as they have to prove to the regulators that the policies they provide are fit for purpose,” says Howell. “If the policies provided never paid out, then they would get in trouble with the regulators and ultimately face fines or closure. At the same time, they also have to meet internal checks to ensure that the policy triggers and the quantum claimed is correct, and this is not always straightforward and will involve a third-party loss adjuster.”
At erpam, MD Raith notes, “We sometimes see that brokers, due to their networking with large corporations such as Live Nation, DEAG, Eventim, etc., have problems in making favourable offers. After all, the broker’s main client should feel that he is getting the best premiums.”
“But, especially in framework agreements, all eventualities have to be priced in, and thus these are often worse premiums, but also conditions. Fortunately, we are independent of these groups and can therefore agree on an individual premium with each client. This sometimes also has a positive effect on the conditions.”
“The broker’s main client should feel that he is getting the best premiums”
“The product is still extremely reliable and caters for a wide range of risks that are taken when putting on an event,” adds Connell. “Especially as brokers, we are here for the clients, and we work on behalf of the clients and not the insurers, so engaging with us will hopefully get the results that clients want from their insurance policy.”
In closing, Goebbels remarks that while the present climate is “not the rosiest,” the market should start to level out in the wake of completing a full year of post-Covid touring.
“It’s certainly not all bad,” he says. “Insurance is still there to help where it can, and it always has been. Just please make your broker part of your team at a very early stage. Don’t hold them at arm’s length and expect them to jump in and bail you out at the last minute.”
“Too many people leave it too late and are then shocked at the price or the policy terms. People look at the weather forecast and think, ‘Oh Christ, it’s not looking too good next week. I better get some insurance in place.’ Well, insurers also look at that weather forecast and say, ‘No, it doesn’t look good, so I’m not going to cover it.’”
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.
TicketPlan teams with See Tickets in US
Ticket insurance and protection specialist TicketPlan has partnered with See Tickets to provide a refund insurance solution to customers in the US.
The link-up was secured via TicketPlan’s long-standing relationship with Florida and Pennsylvania-based GoReady, a leading provider of travel insurance in the States.
“We are delighted to be providing See Tickets with a refund insurance solution in the USA via our partnership with GoReady and we are all incredibly excited to be working with one of the US’s fastest growing live event ticketing companies,” says Ben Bray, Ticketplan’s relationship and development director.
Established in 1999, TicketPlan enables ticketing companies, venues, events and other organisations to provide an added value service to ticket buyers and develop a new and incremental source of revenue.
“We’re happy to work with the TicketPlan team to offer added protection for ticket purchases”
“We are big fans of See Tickets’ client-friendly approach,” says GoReady CEO Jason Schreier. “GoReady is proud to add its benefits and services to that already outstanding equation.”
UK-based TicketPlan expanded into the Polish market in 2019, having already established its presence in the Dutch, Danish and Italian markets, and announced a partnership with UK ticketing firm and live events website Skiddle last summer.
“Fans have been asking for a solution to protect themselves when the unexpected happens in a ‘no refund’ world,” adds Boris Patronoff, See Tickets Group COO and CEO of See Tickets North America. “We’re happy to work with the TicketPlan team to offer added protection for ticket purchases.”
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.
Australian fest insurance dispute goes to court
A dispute between insurer Lloyd’s and Australia’s Subsonic relating to the festival’s 2019 cancellation has gone to court.
Event organiser Scott Commens is suing Lloyd’s for A$900,000 (€581,000) after the insurer argued the 5,000-cap electronic music festival, set for Riverwood Downs, near Monkerai, could still have proceeded despite the Black Summer bushfires raging in the area.
The Advocate reports that Lloyd’s stands by its decision not to pay out, with the company’s barrister Mark Newton pointing to the venue taking other bookings in the month that Subsonic was due to have been held.
“There was a variety of reasons why the landowner decided the event could not take place,” added Newton, who said the major issue was a question of fact about the “policy trigger” for the cancellation.
“It was a pretty dire circumstance”
According to documents previously filed with the federal court, Commens claims the December 2019 cancellation was necessary due to the extreme weather threat.
Stephen Walsh, representing Commens at a case management hearing earlier this month, said his client was seeking compensation for expenses incurred that had been calculated in a forensic accountant’s report.
Adjourning the case to February, on a date to be confirmed, Chief Justice James Allsop described the 2019/20 bushfires – which claimed 34 lives – as some of the “worst in living memory”. “It was a pretty dire circumstance,” he added.
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.
Western Australia expands live events support
The government of Western Australia (WA) has expanded its live events support programme to include rescheduled shows.
The Getting the Show Back on the Road+ (GTSBOTR+) programme was originally set up to reduce the financial risks of running a ticketed event during the pandemic.
The expansion of the programme will allow promoters to recoup the unrecoverable costs of up to 30% of pre-approved box office value – which is capped at A$150,000 – when events are rescheduled.
This will enable live events that are not viable under current Level 2 public health measures to be moved to more suitable dates later in the year.
The changes follow discussions between the state government and the live events industry on how the programme could be adjusted to better support the sector.
Culture and the arts minister, David Templeman, says: “Live event organisers now have more certainty around putting on shows in Western Australia during this difficult time, knowing they are supported with the unrecoverable costs of rescheduling.
“These changes will mean a number of terrific upcoming shows can now be rescheduled rather than cancelled”
“We have listened to feedback from the live events industry and expanded the programme accordingly.
“I am very pleased these changes will mean a number of terrific upcoming shows can now be rescheduled rather than cancelled. It is a great result for our local live events industry and all WA music fans.”
The announcement has been welcomed by Live Entertainment Western Australia, which can now confirm rescheduled shows for Midnight Oil, Crowded House, Hoodoo Gurus, Hunters and Collectors with James Reyne, Jimmy Barnes, Mondo Rock, Ian Moss, and Missy Higgins, Birds of Tokyo, and the Waifs.
Live Entertainment WA president, Brad Mellen, comments: “The rescheduled shows would have been cancelled without the assistance now being offered to enable rescheduling.
“The system’s not perfect – there’s still the problem of shortfalls in sales when sold-out shows are rescheduled – but it reflects great credit on the government that it listened to representations and has acted to provide assistance for rescheduling.
“Hopefully, things will get back to something like normal in the next few months and Western Australia will again see international acts absent now for more than two years.”
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.
NZ extends insurance scheme, expands criteria
The New Zealand government has announced plans to extend its insurance scheme for large-scale events by another year.
Under the scheme, the government underwrites 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.
The new criteria include events that have been cancelled or postponed because the lead artist has to self-isolate, as well as business events with at least 200 attendees.
Touring events at multiple venues on multiple dates are now eligible on the basis that the cumulative total of attendees is over 5,000 and they meet all other criteria.
The expanded criteria also states that events must be organised by a New Zealand registered organisation (e.g., an entity registered with the Companies Office or a charitable organisation).
“These changes will provide confidence to hundreds of events throughout 2022 and into next summer”
Eligible events must also have been publicly announced or “actively in the market” before 23 January next year, unless it is a recurring event with a history of previous iterations over the last three years or a touring event held at multiple venues or on multiple dates that can demonstrate a financial commitment to the event dates at least four months prior to the event being held.
As per the first iteration of the scheme, events must require the use of Covid-19 vaccination certificates and organisers can only apply once for cancellation and once for postponement for an event.
The first incarnation of the scheme is running between 17 December 2021 and 3 April 2022. The new criteria apply to events taking place between 4 April 2022 and 31 January 2023.
The extension of the scheme follows the country’s move to red in the Covid traffic light system, under which events are limited to 100 people.
“The current Omicron variant of Covid-19 and the red setting in the protection framework are having a severe impact on the events sector,” says economic and regional development minister Stuart Nash. “We have adapted the scheme to take account of this to further support the industry for the rest of the year.”
“This is disappointing for event organisers, artists, and everyone associated with a large-scale event, including attendees… These changes will provide confidence to hundreds of events throughout 2022 and into next summer, so organisers can continue to organise events, despite the ongoing uncertainty that Covid-19 brings to our communities.”
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.
Boost for Live Nation in Covid insurance lawsuit
Live Nation has been handed a boost in its lawsuit against insurer Factory Mutual (FM) over its failure to cover the promoter’s “severe and unanticipated” losses stemming from the pandemic.
In January 2021, Beverley Hills-based Live Nation launched legal action against FM in the former’s home state of California for allegedly wrongfully refusing to pay out.
The complaint, filed in the US district court for central California, said that LN “reasonably” believed that Factory Mutual Insurance Co. would promptly cover its losses, as it has an “all-risks policy” covering lost income, property damage, extra expenses and interruptions from communicable diseases.
The filing notes that by the end of Q3 2020, the company had cancelled more than 5,000 concerts and pushed around 6,000 shows into 2021.
US district judge John A Kronstadt rejected FM’s bid to trim the lawsuit
According to Law360, Rhode Island-headquartered FM argues that, while it accepts Live Nation is entitled to cover for communicable diseases, it will not provide full coverage under the “physical loss or damage” section of the 2019 policy as Live Nation “did not suffer any physical damage or loss stemming from the virus”.
However, US district judge John A Kronstadt last week rejected FM’s bid to trim the lawsuit, ruling that it cannot be determined that – as a matter of law – the presence of Covid-19 in Live Nation’s properties could not cause “physical loss or damage”.
“The complaint sufficiently alleges that infectious respiratory droplets, which transmit Covid-19, are physical objects that may alter the property on which they land and remain,” he wrote, reports WFAV.
The conclusion does not mean that Live Nation’s case has been successful, but that FM has failed to have it dismissed at the earliest stage.
Neither side has commented on the development.
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.
NZ faces ‘staggering’ number of event cancellations
A ‘staggering’ number of major events across New Zealand have been cancelled and more are expected, following the country’s recent move to red in the Covid traffic light system.
As of 11:59 pm on Sunday (23 January), indoor and outdoor events across the country are limited to 100 people and the use of vaccine passports is mandatory.
The new restrictions prompted a fresh wave of cancellations including music, food, and wine festivals, sports tournaments, arts events, and a wide array of summer festivities scheduled for February and March.
The latest casualties include the sold-out Splore festival, which would’ve taken place between 25–27 February at Tapapakanga Regional Park in Orere Point.
In a statement, the organisers said the country’s move to red “doesn’t leave any room for ambiguity”.
Organisers said the country’s move to red “doesn’t leave any room for ambiguity”
Elsewhere, The Others Way festival, which was scheduled for next Saturday (29 January) in Tāmaki Makaurau, Auckland, has also been pulled.
Anthonie Tonnon, Carnivorous Plant Society and Coolies were scheduled to perform at the event, promoted by Flying Out, 95bFM and UTR Presents.
Other cancelled events include Auckland Pride Festival (1–27 February), New Zealand Fashion Week (7–12 February, Auckland), Great Kiwi Beer Festival (23 January, Christchurch), Warbirds over Wanaka (15–17 April) and the Bluff Oyster Festival (21 May).
Outfields music festival (Auckland), Rhythm and Vines (Gisborne) and Northern Bass (Northland) have already been postponed.
At the time of writing, no decision has been made on major upcoming festivals including Electric Avenue Music Festival, Urban Polo in Christchurch, South Island Wine and Food Festival.
Only cancelled events or postponed events with more than 5,000 vaccinated attendees can make use of the government insurance scheme, announced last year, which covers 90% of unrecoverable costs.
The move to red in the Covid traffic light system comes after a cluster of nine Omicron cases were recorded.
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.
NSW gov announces $43m ‘Event Saver Fund’
The New South Wales (NSW) government has established a AUS$43 million support fund to boost the confidence of event organisers.
The Event Saver Fund will cover major events, taking place between Wednesday 15 December 2021 and Saturday 31 December 2022, that are “cancelled or significantly disrupted” by Covid-19 public health orders.
Only one claim can be made per eligible event and the maximum amount that can be paid per eligible event is $10m, according to the guidelines. Exceptions for the latter may be made for not-for-profit organisations at the sole discretion of the minister for the arts.
According to the guidelines, the financial support provided by Event Saver is intended to “contribute towards eligible
unrecoverable costs incurred by organisers of affected events; it is not intended to compensate event organisers for loss of revenue or loss of profit”.
The Event Saver fund, first announced in October 2021, comes after the Victorian state government launched an interruption insurance scheme for music festivals last November.
“It will go a long way to providing improved confidence for major festivals and events scheduled for 2022”
“Today’s announcement of an Event Saver Fund for major events has come just in time for organisers impacted by recent restrictions due to the current Omicron wave in NSW,” says Australian Festivals Association (AFA) MD Julia Robinson.
“It will go a long way to providing improved confidence for major festivals and events scheduled for 2022 and help relieve the financial burdens associated with cancellations.”
However, Byron Bay Bluesfest (pictured) promoter Peter Noble told The Music News that an insurance safety net is also needed to cover any shortfall.
The Australian festival industry has been calling for a nationwide insurance scheme for more than 18 months.
“Australia now lags behind New Zealand, the UK, Germany, Austria, Netherlands, Belgium, Norway, Denmark and Estonia in delivering a solution to this issue,” reads a recent statement by united live music and entertainment industry bodies including Live Performance Australia.
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.
Germany’s €2.5bn culture fund ‘hardly used’ so far
Germany’s €2.5 billion event cancellation fund has ‘hardly been used’ so far, according to a new report.
The government-backed insurance pot, announced in December 2020, was introduced to enable event organisers to plan for Q3 and Q4 2021 without the financial risk posed by a potential Covid outbreak.
Only €44m was requested from the fund by mid-December 2021, according to German news magazine Spiegel, which obtained a report by the minister of state for culture to the government’s budget committee.
Of that amount, €40m has been requested from the €1.9bn ‘profitability aid’, dedicated to compensating financial losses for live events held under capacity in order to meet Covid-19 restriction.
The remaining €4m has been requested from the €600m ‘failure protection’ pool, which is used to cover up to 90% of losses incurred by the cancellation of events and shows which are called off due to the pandemic.
Despite the modest amount of applications, the report states that the fund has been met with “great response” from organisers.
“The funding programmes [may be] so complicated that as little money as possible reaches the people who urgently need help”
The minister of state for culture points out that applications for both funding pots can only be made retrospectively, when the respective event has already taken place.
However, according to Spiegel, the number of events registered for aid is significantly higher than the number of actual applications: around 23,400 events have so far been registered for economic aid, which corresponds to a funding volume of up to €795m.
Around half of the registrations are from concerts and festivals, and another 40% to performances of the performing arts.
To date, around 2,000 events have been registered for failure protection, which would mean a maximum funding volume of around €859m. Almost three-quarters of these registrations are concerts and festivals.
According to the report, it is to be expected “that the number and volume of applications will increase significantly in the coming weeks and months because events are being avoided or increasingly cancelled in the current pandemic situation.”
It’s yet to be seen how many funds will be approved.
Gesine Lötzsch, the budgetary spokeswoman for the Left, said: “I have the impression that the funding programmes are so complicated that as little money as possible reaches the people who urgently need help.”
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.