The UK government has partnered with the specialist Lloyd’s insurance and reinsurance marketplace to deliver the Live Events Reinsurance Scheme, which is worth more than £750 million and designed to help organisers plan events with confidence.
While the majority of Covid-19 restrictions have now lifted in the UK, the losses faced by re/insurers as music festivals and alike were either postponed or cancelled through 2020 and into this year, created an issue within the event cancellation line of business.
The pandemic showed that for re/insurers, event cancellation business is perhaps not as diversifying as previously believed, with COVID-19 shutting down all kinds of events in all corners of the world at the same time.
It’s been reported that coverage for live events is either very expensive or excluded altogether, which for many large events simply means they cannot go ahead.
The UK government has been under pressure for some time to back an event cancellation scheme, having previously said this would not come to fruition before June 2021.
Now, as part of its Plan for Jobs initiative, the government has partnered with Lloyd’s to deliver a £750 million Live Events Reinsurance Scheme, which effectively sees the government act as a reinsurer, stepping in with a backstop so that insurers can offer their solutions.
The scheme is designed to cover costs incurred in the event of cancellation due to the event being legally unable to happen because of government-enforced COVID-19 restrictions.
In the UK, the live events industry is worth over £70 billion annually to the economy and supports over 700,000 jobs.
The scheme is supported by numerous Lloyd’s insurers, including Arch, Beazley, Dale, Hiscox, and Munich Re, which will provide events firms with the option of obtaining cover from next month, alongside standard commercial events protection.
The new scheme will be available from September 2021 and is scheduled to run until the end of September 2022.
Commenting on the scheme, Rishi Sunak, Chancellor of the Exchequer, 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.”
The Culture Secretary, Oliver Dowden, added: “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.”
Jamie Njoku-Goodwin, Chief Executive of UK Music, said: “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.”
Lloyd’s CEO, John Neal, commented: “Lloyd’s has stood by its customers throughout the pandemic, and we are pleased to strengthen those efforts by partnering with the UK government to deliver the Live Events Reinsurance Scheme. 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.”