Chancellor Rishi Sunak announced the launch of a long-awaited government-backed insurance scheme for the live events sector, worth over £750 million, which will help the industry plan events with confidence through to next year.
As the economy reopens with the lifting of Covid restrictions, getting the right kind of insurance is acting as a barrier for some events organisers.
The Government has partnered with Lloyd’s to deliver the Live Events Reinsurance Scheme as part of the Plan for Jobs. 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 – such as music festivals and business events. 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 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, giving them the reassurance they need to plan ahead while also ensuring value for money for taxpayers
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."
"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."
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 £2b Culture Recovery Fund, and the £500m Film and TV Production Restart scheme – which has seen 610 independent film and TV productions and more than 50,000 screen sector jobs supported by the scheme in the last 12 months.
More than £1b in support has also been provided to the sport and leisure sectors, including a £600m survival package for a range of spectator sports severely impacted by coronavirus restrictions. It is the most generous bespoke support from any Government for its domestic sport sector in the world.
Chris Skeith, CEO of the Events Industry Alliance said: "The EIA, comprising of AEO, AEV and ESSA, welcome the Chancellor’s announcement of a new Covid Cancellation Insurance Scheme. The exhibitions sector has been significantly impacted during the pandemic with forced cancellations due to government and local authority restrictions. While we understand the necessary public health restrictions that have been in place, the impact on the sector has been devastating. The uncertainty caused by the pandemic has undermined the insurance market for our sector.
"This government-backed insurance scheme will bring some much needed confidence to a sector, and its supply chain, which often acts as the UK’s shop window to the world, and allow the industry to rebuild itself despite the continued uncertainty pandemics bring. Our members provide trading platforms for over 180,000 businesses, fuelling trade and economic impact across the UK and across every market sector, and we look forward to playing our part in driving the UK’s economic recovery. This new insurance scheme will hopefully play an important role in our ability to do that as we reopen in a safe and responsible manner."
Lesley Robinson, CEO of British Marine, the organisers of Southampton International Boat Show said: "The announcement of the Live Events Reinsurance Scheme could not have come at a more critical point for us and is the news that we, and the entire events industry have been desperately calling for, so we welcome this scheme.
"Having worked closely with Government to get to this point, this insurance cover is now incredibly important for large events like the Southampton International Boat Show which have significant upfront infrastructure costs. It simply isn’t worth contemplating what another enforced closure of our event without this insurance would have done to our own industry.
"Although this new cover is welcome, it does come at a significant premium, which, for many small businesses like ours, which have endured extreme financial challenges during the pandemic, will impact heavily on our ability to generate surpluses that in our case are reinvested entirely in our industry.
"With the successful rollout of the Covid vaccination scheme in the UK, we hope that this insurance scheme is only ever an unused safety net for the events industry."
Lloyd’s CEO John Neal said: "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."
"This is obviously very welcome news to all those working in the events industry. We’ve all had an extremely tough 18 months due to Covid, and the Government backed insurance scheme is exactly what’s needed to give organisers of live events some security when planning for the future", adds Richard Thompson, Co-Managing Director of The Business Magazine. "At The Business Magazine, we have a long established pedigree of delivering first class business events and experiences and we’re looking forward to welcoming people back this autumn."