The live events sector is set to get a boost with a government-backed insurance scheme worth over £750 million.
The initiative announced by Chancellor Rishi Sunak is designed to help them plan events with confidence through to next year. Sunak visited London Wonderground, a festival site run by Underbelly, to launch the scheme.
The live sector and UK trade bodies have been calling for such a scheme to help revive events, including festivals, following the lifting of Covid restrictions.
Securing the right kind of insurance has been acting as a barrier for some events organisers. As a result, the government has partnered with Lloyd’s to deliver the Live Events Reinsurance Scheme. The scheme will see the government act as a ‘reinsurer’ – stepping in with a guarantee to make sure insurers can offer the products events companies need.
This scheme will support live events across the UK that are open to the general public, including music festivals. It will cover costs incurred in the event of cancellation due to the event being legally unable to happen due to government Covid restrictions.
The entire 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.
A number of prominent insurers in the Lloyd’s market, including Arch, Beazley, Dale, Hiscox and Munich Re are supporting the scheme, which will provide events companies with the option of purchasing cover from next month, alongside standard commercial events insurance.
Chancellor of the Exchequer, Rishi Sunak, said: “The events sector supports hundreds of thousands of jobs across the country, and I know organisers are raring to go now that restrictions have been lifted. But the lack of the right kind of insurance is proving a problem, so as the economy reopens I want to do everything I can to help events providers and small businesses plan with confidence right through to next year.
“We have some of the best events in the world here in the UK – from world-famous festivals to your local fair. With this new insurance scheme, everything from live music in Margate to business events in Birmingham can go ahead with confidence, providing a boost to the economy and protecting livelihoods through our Plan for Jobs.”
Culture Secretary Oliver Dowden said: “We’ve been here for live events throughout the pandemic with billions of pounds of rescue funding. Today is an important next step as we develop live events insurance to give them the confidence they need to plan for a brighter future.
"Our events industries are not just vital for the economy and jobs; they put Britain on the map and, thanks to this extra support, will get people back to the experiences that make life worth living. All part of our plan to rescue, reopen and recover."
Tim Thornhill, director of Tysers insurance brokers, told Music Week: “This is much needed news for the events sector. The approach taken by Treasury is sensible and pragmatic whilst It will allow the commercial insurance market to step back in when the certainty about the implications of Covid-19 improve. We look forward to working with the industry and departments in the coming months to ensure that this builds the confidence in the sector as it should.”
“It is really welcome that the government has acted on a key recommendation from our inquiry into the future of UK music festivals," said DCMS Committee chair Julian Knight MP. "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.”
This vital intervention from the UK government offers certainty to artists, concert and festival promoters
Lloyd’s CEO John Neal said: “This unique and critical cover will enable live events to resume around the country with confidence as society begins to reopen and begin its recovery, and we are proud to be playing our part.”
According to the Treasury, this is one of the only insurance schemes in the world to cover such a wide array of live events and not put a cap on costs claimed per event. The scheme will be delivered through insurers with events organisers able to purchase cover for government-enforced cancellation due to the event being legally unable to happen due to government Covid restrictions, alongside their standard insurance.
The scheme will be available from September 2021 and run until the end of September 2022. It comes on top of the extensive support already given to the cultural sector, including the £2 billion Culture Recovery Fund.
Click here for Oliver Dowden’s Music Week opinion piece on the government’s plans for live music.
Music industry reaction
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.
“We are extremely grateful to government for listening to the calls of the sector and delivering a solution to the market failure in the insurance industry. Ministers deserve huge credit for action that will protect jobs, stimulate activity, and help kickstart the sector into playing a leading role in the post-pandemic economic and cultural recovery.”
Live Nation UK & Ireland chairman Denis Desmond: “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.”
Sacha Lord, co-founder of the Parklife Festival, co-founder of The Warehouse Project events, and Night Time Economy Adviser for Greater Manchester: "I'm really pleased that the government has decided to introduce an insurance scheme for the events sector. DCMS has worked alongside and listened to event organisers throughout the crisis, and I'm grateful that they have now been able to introduce this support today.
“The events sector has been in dire straits throughout this crisis and this move will not only save hundreds of upcoming events, but will support the thousands of freelancers behind the scenes who depend on the sector for their own livelihoods. We can start to rebuild the sector with confidence, and renew the UK's status as a global leader in entertainment and cultural events."
Greg Parmley, CEO, LIVE: "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, Association of Independent Festivals: “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 organisers 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 andavoid such an eventuality and ensure that organisers can plan with increased confidence for 2022."
Phil Bowdery, chairman of the Concert Promoters Association: “This is welcome news from DCMS. 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.”
Duncan Bell from #WeMakeEvents: “WeMakeEvents was formed to represent the businesses, organisations and freelancers that make up the Live events supply chain and whose livelihoods have been severely hit by Covid. We are pleased to learn of plans for a government-backed insurance scheme for the events sector, and hope that this will start to rebuild confidence and investment in live events, conference, and exhibitions in the UK. WeMakeEvents looks forward to working closely with the government to fine tune the details of the scheme.”
Deborah Annetts, ISM chief executive: “The introduction of a government-backed reinsurance scheme is an enormously positive step and musicians will breathe a sigh of relief today. We have world class performers in our country and this support means that they should be able to get back to what they do best, entertaining live audiences once more.
“It has always been clear that the live events sector would be unable to return to anything like its previous strength without reinsurance support, which begs the question, why did the government not come forward with this support earlier and prevent our sector missing out on months of planning after an incredibly difficult period?
“The creative industries have pulled together and campaigned tirelessly for this important scheme, and while we’ll examine the details closely, we’re delighted that the government has listened and delivered.”
Michael Kill, CEO NTIA: “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.”