LONDON, June 29 (Reuters) – The UK government is expected to announce in the coming weeks an insurance program for live events, including festivals, theater and sports, to allow them to continue despite the pandemic, have indicated sources in the insurance industry.
Since last year, insurers have removed COVID-19 from event cancellation insurance policies, meaning event planners have no coverage if a coronavirus outbreak forces them to tear up their schedules.
A report from a parliamentary committee last month called for a government-backed insurance scheme for live events, similar to a successful £ 500million ($ 696.05million) scheme introduced for the film and television industry last year.
The government must respond to the committee’s report by the end of the month.
The idea was to “consider options” in terms of insurance and compensation, Nigel Huddleston, deputy minister at the UK’s Department of Culture, told Parliament last week.
“We hope there will be an announcement,” said Tim Thornhill, director of insurance broker Tysers, stressing the urgency given that there have already been cancellations.
The Womad Music Festival canceled its July 2021 festival on Monday, citing the government’s reluctance to provide insurance to festivals.
However, sources in the insurance industry said the Ministry of Digital Culture, Media and Sports has set up an “event compensation sprint team” in several ministries and a government spokesperson. said the ministry was working hard to support the live events.
“We are aware of the broader concerns about ensuring indemnity coverage and are exploring what additional support may be needed when the sector can reopen,” a ministry spokesperson said via email.
Prime Minister Boris Johnson has said further lockdowns cannot be entirely ruled out, but Britain is on track to lift most of the remaining COVID-19 restrictions on July 19. read more
Advocating for government support, the cultural sector says this is a huge tourist draw and that theater closures last year and this year have taken a heavy toll on the economy.
In 2019, before the pandemic, the UK music industry alone contributed £ 5.8bn ($ 8.04bn) to the economy, UK Music said.
After months of shutdowns or reduced performances with small audiences to allow for social distancing, planning ahead to revive the industry is nearly impossible without event cancellation insurance, say theater and music directors.
This makes government intervention crucial if the commercial sector does not pay.
“It would make a huge difference to us,” said Neil McPherson, artistic director of the Finborough Theater, an independent venue in west London.
“We basically have the choice of continuing productions with devastating repercussions if we have to cancel, or canceling completely in advance because we can’t take any risks.”
Andrew Lloyd-Webber and other West End impresarios also said last week that a government-backed insurance scheme was vital. Read more
Specialty insurers from Lloyd’s of London and the wider London commercial insurance market would likely provide initial coverage, brokers said, but most would take the form of government backing.
This structure would allow the government to reduce its exposure as the risk of COVID-19 decreases.
“There have to be insurers involved so there is an exit plan,” said James Davies, division director, sport and entertainment at EC3 Brokers. Tysers and EC3 both provided data to the government to help them design a program.
Industry sources are hoping for a program at least as large as the film and television program. The larger the program, the greater the variety of events that can 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 million to £ 300 million of insurance.
($ 1 = 0.7216 pounds)
Editing by Jane Merriman
Our Standards: Thomson Reuters Trust Principles.