The UK government is expected to announce an insurance scheme for live events, including festivals, theater and sports, in the coming weeks so they can keep going despite the pandemic, insurance industry sources said.
Insurers have been removing COVID-19 from insurance policies for event cancellation since last year, meaning event organizers will not have insurance coverage if a coronavirus outbreak forces them to tear up their schedules.
A report by a parliamentary committee last month called for a government-sponsored live event insurance scheme, similar to a successful £ 500 million ($ 696.05 million) scheme introduced for the film and television industry last year.
The government is due to respond to the committee’s report by the end of the month.
“Options in terms of insurance and compensation have been considered,” Nigel Huddleston, a junior minister in the UK Department of Culture, told Parliament last week.
“We hope there will be an announcement,” said Tim Thornhill, director of insurance broker Tysers, highlighting the urgency that cancellations have already given.
The music festival Womad canceled its festival in July 2021 on Monday because the government was unwilling to provide insurance support for festivals.
However, insurance industry sources said the Department of Digital, Culture, Media and Sports has set up an “Event Liability Sprint Team” across several government departments, and a government spokesperson said the department is working flat out to promote live events support.
“We are aware of wider concerns about ensuring liability insurance and are looking into what further assistance may be needed if the sector can be reopened,” a ministry spokesman said via email.
Prime Minister Boris Johnson has said that further lockdowns cannot be completely ruled out but that the UK is on track to lift most of the remaining COVID-19 restrictions on July 19th.
The cultural sector is pushing for government support, saying it was a big tourist draw last year and that theater closings and this year the economy have dealt a severe blow.
In 2019, before the pandemic, the UK music industry alone contributed £ 5.8 billion ($ 8.04 billion) to the economy, UK Music said.
After months of closings or scaled-down performances with reduced audiences to allow social distancing, planning ahead to revitalize the sector without event cancellation insurance is next to impossible, theater and music directors say.
That makes government intervention crucial when the commercial sector doesn’t pay.
“It would make a huge difference to us,” said Neil McPherson, artistic director of the Finborough Theater, an independent venue in West London.
“Basically, we have the choice of continuing productions with devastating consequences if we have to cancel, or canceling completely in advance because we cannot take the risk.”
Andrew Lloyd-Webber and other West End impresarios also said last week that a government-sponsored insurance system was vital.
Specialty insurers in Lloyd’s of London and the wider London commercial insurance market would likely provide some initial coverage, the brokers said, but most would be in the form of a backstop from the government.
This structure would allow the government to reduce their exposure as the risk of COVID-19 subsides.
“It needs insurers to have an exit plan in place,” said James Davies, director of sports and entertainment at EC3 Brokers. Both Tysers and EC3 have provided data to the government to help them design a program.
Industry sources hope for a program that is at least as large as the film and television programs. The bigger the program, the greater the variety of events that could be covered, including conferences and weddings, they said.
Thornhill said Tysers modeling showed the government could insure £ 1.1 billion in event costs with £ 250-300 million insurance.
($ 1 = 0.7216 pounds) (Adaptation by Jane Merriman)
The most important insurance news in your inbox every working day.
Get the insurance industry’s trusted newsletter