Pressure mounts on UK gov to back Covid insurance
Glastonbury organiser Emily Eavis has joined many across the UK’s live industry in appealing for a government-backed event cancellation fund to enable operators to plan for next year without the financial risk posed by a potential Covid outbreak.
In an interview with The Sunday Times, Eavis said the festival had struggled to get cancellation insurance from commercial underwriters to help cover losses if next summer’s event once again needs to be postponed or cancelled.
The appeal comes after her father Michael, with whom she organises the festival, warned back in June that they would “seriously go bankrupt” if they were not able to hold the festival again next year.
In the Times interview, Emily called for the government to launch an insurance fund of its own – similar to schemes that have launched in Germany and Austria – to provide a safety net so that organisers can still make plans in the hopes that it will be safe to hold festivals next summer.
“If the gov can share the risk by offering direct financial support, it gives everyone the opportunity to move forward”
“If the government can share the risk by offering direct financial support, then it gives everyone the opportunity to move forward with the planning in the hope that things will be safe to run in the summer, and in the knowledge that backing is available if we’re simply not in a position to go ahead,” she added.
Eavis is the latest in a long line of operators, MPs, insurers and lobbyists that are appealing to the government for event cancellation cover.
LIVE (Live music Industry Venues and Entertainment), the umbrella group representing the UK live music industry, has been in conversations with DCMS officials for several months regarding a reinsurance scheme and has submitted its own industry-wide proposal for a scheme.
The body has also backed a proposal from a new campaign group Let Live Thrive (LLT) which comprises MPs, Peers, major events organisers and insurers.
The lobbying group last week penned an open letter to culture secretary Oliver Dowden warning that major live events across the UK will not go ahead in 2021 unless a government-backed insurance scheme is swiftly introduced.
— Let LIVE Thrive (@Let_Live_Thrive) December 10, 2020
It reads, “The planning, insurance buying and decision making is happening now. Though we can’t predict the social distancing requirements for 2021 at this stage, this won’t matter if contingency insurance remains unavailable; live events will simply not take place.”
LLT’s proposal is a solution similar to Pool Re, a government-backed reinsurance fund for terrorism insurance. Steven Howell from Media Insurance Brokers (MIB) told IQ recently that he believes this solution could work if premiums are raised in line with VAT.
“Most people are used to paying 20% VAT. On insurance, you pay 12% so even if you increase it to 15 and siphoned off that 3%, it would create a pot of money through insurance that is available to bail out in case of cancellation,” he said.
The calls from the UK industry come after the German government last week announced a €2.5 billion cancellation fund to allow event organisers to plan for the second half of 2021 without the financial risk posed by a potential Covid outbreak.
Finance minister Olaf Scholz said the federal government would like to reimburse all costs “which were made in optimistic expectation and cannot be realised due to corona restrictions” for events in the second half of 2021.
“Otherwise the pandemic will be over at some point, but there will be no concerts. And so the whole machinery with the many self-employed soloists and musicians gets back on its feet,” he added.
Scholz says he is also working on a funding program to support cultural events that are financially impacted by capacity restrictions enforced due to coronavirus, as well as hybrid shows.
In October, the Austrian federal government announced a similar scheme to remove the risk for event organisers and allow them to carry on business as usual.
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