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UK Introduces $1B Government-Backed Insurance Scheme For COVID Cancelations
Dave J Hogan/Getty Images – The crowd react as Bombay Bicycle Club perform during Latitude Festival 2021 at Henham Park on July 25, 2021 in Southwold, England.
The festival was part of the UK’s Events Research Programme, and could thus plan ahead with some security.
After more than a year of the live entertainment sector lobbying government for an insurance scheme for COVID-related event cancelations, the UK government has complied. The sector reacted.
The insurance scheme, which is backed by a number of private insurance companies united under the roof of insurance giants Lloyd’s, is worth more than £750 million ($1 billion).
“It will cover costs incurred in the event of cancellation due to the event being legally unable to happen due to Government Covid restrictions,” according to the official wording from the government, which goes on to acknowledge, that “the live events sector is worth more than £70 billion annually to the economy and supports more than 700,000 jobs, including small businesses and the self-employed.”
From September 2021, promoters will be able to take out insurance from the Lloyd’s companies, including Arch, Beazley, Dale, Hiscox and Munich Re, alongside standard commercial events insurance.
The scheme will run until the end of September 2022, giving planning security for next year’s concert and festival season, but coming too late for most of the UK’s festivals this year.
The insurance scheme comes on top of the UK’s £2 billion Culture Recovery Fund (CRF), which was a lifeline for parts of the sector, while others fell through the cracks.
Carla Speight/Getty Images – The crowd enjoying Kendal Calling 2019, at Lowther Deer Park in Kendal, England.
The insurance scheme comes too late for this beloved event, which already canceled for a second year running.
The UK live industry has reacted mostly positively to the new insurance scheme, however, it also pointed out flaws in the scheme, such as the lack of coverage in case an even isn’t canceled but merely reduced in capacity, as well as the fact that the news comes too late for many.
A selection of voices from the UK live sector below:
A statement provided by Live Nation UK reads, “This vital intervention from the UK Government offers certainty to artists, concert and festival promoters in the live entertainment market. This is very welcome news and will help keep the sector and its employees working.”
Greg Parmley, CEO of the UK’s live industry body LIVE, commented, “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.”
Paul Reed, CEO of the country’s Association of Independent Festivals, said, “AIF has campaigned for a Government-backed insurance scheme for festivals for over a year, from raising it as a headline issue with the DCMS Select Committee to working with DCMS colleagues and presenting detailed evidence and data to support the case.
“We are pleased that Government has listened, and we welcome this intervention to address the insurance market failure. It is positive that festival organizers 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 organizers can plan with increased confidence for 2022.”
Katja Ogrin/Redferns – Peter Hook and The Light performing on stage at Beyond The Tracks Festival 2017 in Birmingham, England.
The festival takes place at the end of August, meaning that it wouldn’t be covered by the new insurance scheme.
Phil Bowdery, chairman of the UK Concert Promoters Association: “This is welcome news from [the Digital, Culture, Media and Sports Committee]. 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.”
Julian Knight MP, committee chair of the Digital, Culture, Media and Sports Committee, said, “It is really welcome that the Government has acted on a key recommendation from our inquiry into the future of UK music festivals. We have been calling on Ministers to introduce this safety net since January.
“Though it is a shame that it has come too late for some this summer, this scheme will provide the confidence the sector needs to plan and invest in future events.”
Michael Kill, CEO of the Night Time Industries Association: “I am extremely pleased that the Government has decided to introduce an insurance scheme for the events and festival sector, it stands testament to a Government that is starting to acknowledge the varying issues within the sector and through engagement, take the appropriate action to protect businesses and jobs.
“Over 700,000 people work within this sector, it will give some comfort and certainty to supply chain and freelancers that heavily rely on this industry for their main source of income, and we would hope that with this news many will feel confident in returning to work within the sector.”
“It is devastating that the timings of this scheme could not have been earlier, as we have already lost many amazing festivals and events to the uncertainty that this pandemic represents, but I feel that this scheme will allow a beleaguered sector to start to rebuild and plan with confidence for the future.”
John Fell from Birmingham-based festivals Mostly Jazz, Funk and Soul, Beyond the Tracks and Moseley Folk Festival: “The just announced government insurance scheme is a welcomed initiative by the music industry. However, the scheme has come 6-8 months too late for many festivals this summer. This includes our own Mostly Jazz, Funk and Soul and Beyond the Tracks which are later in August and then we have a third event in September.
“Most festivals have already postponed to 2022 due to lack of confidence in being able to deliver it with so many moving parts alongside the lack of a government backed insurance scheme.
“It is good news at least for 2022 and will allow festivals to have confidence in trying to deliver a successful season of events in the summer.”
Jamie Njoku-Goodwin, chief executive of UK Music: “For months, UK Music has been warning about the catastrophic impact of the market failure in insurance for live events. The inability to obtain insurance has already caused many cancellations this summer – these have been devastating for the entire music industry and there were fears that without action we would have seen major cancellations continuing well into next year too.
“This new Government scheme is therefore incredibly welcome news – not just for the millions of music fans who have been looking forward to the return of live events, but also for the tens of thousands of musicians, crew members and wider supply chain workers whose jobs depend on continued live activity.”