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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.

National mourning: A state of commotion

The increased risk of event cancellation has led to growing concern for insurers in recent times, but how much are event organisers and artists – or other rights owners and broadcasters – aware of the implications? This applies not only to music events but also to sports, theatre and family shows.

National mourning (NM) is something often not considered by many, but in certain territories this may have a huge impact on all types of live events. Of course, NM can be triggered by the death of a president, a member of a royal family or another kind of leader, or a major natural disaster or tragedy causing large-scale loss of life. For a number of reasons, this has occurred more regularly in recent years.

National mourning
One problem for event organisers and insurers alike is that nobody seems too sure exactly what impact any mourning period could have on live events, or how long it may last. For example, would events be cancelled immediately after the bad news is released, or would it only apply to a period of time around a funeral – and if so, how long?

Maybe that depends on the venues or type of event involved, and – appreciating IQ has international readership – I use the UK purely as an example by asking: Would Royal Parks or the Royal Albert Hall or Royal Ascot or Wimbledon possibly be more affected than a local theatre event? Would such venues or maybe other stadia be taken over and used to televise the funeral, resulting in cancellations? Or possibly, if vast crowds were expected to gather (either to show respect immediately after a death, or to line the funeral route) would police and medical patrols be pulled from other live events to control these numbers?

Nobody seems too sure exactly what impact any mourning period could have on live events, or how long it may last

Information is sparse around the protocol in these circumstances. Earlier this year, a death in one of Europe’s royal families triggered a 12-day national mourning period in the country involved. That country is not one of the most high-profile touring territories, but it does highlight how quickly problems could occur for live events.

I realise it may sound flippant to say, but the old adage is that the one certainty in life is death (and tax – but I won’t go there!), so my points above will become reality to us at some time.

One further question is what happens for a coronation: would a country close live events for this – or, as mentioned above, would parks/stadia/venues or police and safety teams be utilised, resulting in event cancellation? In the UK, sadly, this will happen in the forthcoming years, and, of course, in other countries, too.

While most cancellation insurance policies will automatically include NM cover, often for those up to age 70, it is extremely hard, if not impossible, for insurers to know exactly to whom NM would apply in different territories – for example, the UAE and the countries of the Far East have more than one national figurehead whose demise would trigger a national mourning period, and sometimes for longer periods than in other parts of the world. The age limit could also be a concern as, for example, Elizabeth II (who is queen of 16 countries, as well as head of the Commonwealth), and the current US president are both over the age of 70, and other countries have leaders of similar ages. That is something perhaps agents/managers do not factor in when booking tours or insurance.

Weather and other risks
The world’s erratic weather patterns have caused increasing problems to touring parties and live events, and in areas not previously badly affected. Hurricanes, tornados, storms and heavy snowfall are obvious reasons, but, increasingly, so are extreme high temperatures, resulting in a risk to audiences.

It is extremely hard, if not impossible, for insurers to know exactly to whom NM would apply in different territories

Civil commotion seems to be an increasing risk to events. As I write this, the situation in Hong Kong remains hugely volatile; France, and Paris particularly, have had problems; and they are not the first cities to have such problems in very recent years.

Terrorism, or the threat of, is and always will be a concern to everyone, as it can occur anywhere in the world these days. These risks are excluded under standard cancellation insurance policies, but offered as an optional extra coverage with premiums calculated by insurers on each city and country.

The term “lone shooter” has had reason to become too common but confusion often surrounds whether that person acted totally alone, for their own “vendetta” reasons, or are aligned with a terrorist organisation. How does that affect responsibility under show contracts especially if it doesn’t happen at a venue but results in venues being closed however far away they may be from an incident?

I have not intended to scaremonger, but hopefully provide some food for thought. I will, however, reiterate comments I have made many times in the past: that show contracts are absolutely crucial in determining who would be responsible for paying who in the event of any of the above circumstances. I still see contracts with confusing or very vague versions of the dreaded force majeure clause.

I strongly urge everyone to take the time to consider the implications before the event – not afterwards, when it is too late and only creates business and relationship problems.


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