Live events are set to get a boost with a government-backed reinsurance scheme worth more than £750 million.
The UK government has partnered with Lloyd’s to deliver the Live Events Reinsurance Scheme. It will see the government act as a reinsurer and step in with a guarantee to ensure insurers can offer the products event companies need.
The scheme will support live events across the UK that are open to the general public, including music festivals and business exhibitions. It will cover costs incurred in the event of cancellation due to Covid restrictions, with no cap on costs claimed per event.
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 event companies with the option of purchasing cover from next month, alongside standard commercial events insurance.
The scheme will run until the end of September 2022.
Jamie Njoku-Goodwin, chief executive of UK Music, commented: “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.”
Lloyd’s chief executive officer 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.”
‘A huge collaborative effort’
Commenting on the launch of the government-backed reinsurer, Graeme Trudgill, executive director at the British Insurance Brokers Association (BIBA), which has been calling for a backstop reinsurance solution to this issue, said: “There has been a huge collaborative effort across the insurance industry on this difficult issue. BIBA, along with our specialist members, has been lobbying government for an intervention, explaining that the challenges for insurers created by Covid-19 and its variants were devastating to this part of the economy and that a financial intervention would actually create a 900% return in economic activity.”
Tim Thornhill, director at events specialist broker Tysers and BIBA member, who worked closely the association and played a leading role in convincing the government to intervene added: “The constructive approach taken by HM Treasury and the Department for Digital, Culture, Media & Sport to include the insurance market is a smart, pragmatic approach and means the swiftest possible transfer back to the commercial insurance market once there is more certainty in the future, to take on the risks directly.”
Christopher Croft, chief executive officer of the London and International Insurance Brokers Association, commented: “The insurance broking industry has been working with the government on this scheme for some time, and Tim Thornhill from Tysers has been tireless in his work to solve this problem. We are delighted that the entertainment and events industry now have a solution that will enable events to go ahead. It builds on the film re-start scheme which helps provide greater certainty for the cultural industries that are such a major part of the UK economy.”