UK: Live events protected by £750m government-backed insurance scheme

UK: £750M Government-Backed Insurance scheme

Summary

A government insurance scheme guards UK’s music festivals and other live events if they have to cancel.

Budget 

It will start with a £750 million budget next month to cover cancellation expenses if events are legally unable to take place due to government Covid limitations.

The live events industry has long advocated for such a scheme and has reacted positively to the news.

This summer, more than half of all music festivals have been canceled.

Music Festivals
Music Festivals

Boomtown and Womad festivals

Furthermore, the inability to secure cancellation insurance highlights as a factor in canceling various events, including the Boomtown and Womad festivals.

Boomtown and Womad festivals
Boomtown and Womad festivals

Insurance firms

Insurance firms will provide coverage for live events under the new program, with the government agreeing to act as a reinsurer, ensuring that any payouts are covered.

Julian Knight

“Though it is a tragedy that it has come too late for some this summer,” said Julian Knight, chairperson of the House of Commons Culture select committee, “scheme will provide the confidence to the organizers, and the sector needs to plan and invest in future events.”

Julian Knight
Julian Knight – Member of Parliament of the United Kingdom

Live Nation UK

Live Nation UK, the promoter, called it a “vital intervention” that would provide “stability” to the industry.

However, there are concerns that if another lockdown occurs, it will just payout. “The greatest difficulty” with the system is that it does not cover events that would become expensive if social distancing restarts.

Independent Festivals

The Association of Independent Festivals applauded the initiative but noted that it does not “cover an event that needs to cut capacity or cancel owing to the reintroduction of social distancing regulations.”

Rishi Sunak

Lack of “the right kind” of insurance, according to Chancellor Rishi Sunak, has posed a “problem” for the UK’s live events industry.

“As the economy begins to recover, I want to do everything I can to assist event planners and small companies in making confident plans for the coming year,” he said.

Rishi Sunak -  Chancellor of the Exchequer
Rishi Sunak – Chancellor of the Exchequer

Oliver Dowden

According to Culture Secretary Oliver Dowden, it is “an important next step” for the live events sector, and it will offer organizers “the confidence they need to plan for a brighter future.”

Oliver Dowden
Oliver Dowden – Secretary of State for Digital, Culture, Media and Sport of the United Kingdom

The news comes after the government established the £1.8 billion Culture Recovery Fund to help arts groups and heritage sites hit by the pandemic.

Jamie Njoku-Goodwin

“We are incredibly thankful to the UK government for listening to the sector’s calls and delivering a solution to the market failure in the insurance industry,” said Jamie Njoku-Goodwin, chairman of trade association UK Music.

Chief Executive of UK Music
Jamie Njoku Goodwin – Chief Executive of UK Music

Labor Claimed

On the other hand, Labor claimed that the money was “bare minimum” and that promoters would still take chances by hosting events.

Jo Stevens

Jo Stevens, the shadow culture secretary, called the plan “a solution that does not solve the problem.”

Jo Stevens
Jo Stevens – Shadow Secretary of State for Digital, Culture, Media and Sport in the United Kingdom

Southampton International Boat Show

The government also released endorsements from the Southampton International Boat Show, the Events Industry Alliance, and the Meetings Industry Association.

Southampton International Boat Show
Southampton International Boat Show

The protection will be available for purchase starting next month, with the scheme set to last until September 2022.

However, the events business is not the only one requesting more government assistance.

The travel industry has urged the Treasury to extend the furlough support scheme to protect jobs.

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