LONDON – For more than a year, the U.K. live music industry has been campaigning for a government-backed insurance scheme to help festival and concert promoters get back on their feet. On Thursday (Aug. 5), those calls were finally answered when Chancellor of the Exchequer Rishi Sunak unveiled a 750 million pounds ($1 billion) insurance scheme covering the cost of festival and concert cancellations resulting from COVID-19.
The “Live Events Reinsurance Scheme” enables event organizers in the United Kingdom to purchase cover for government-enforced cancellations, alongside standard commercial events insurance.
Backed by Lloyd’s market insurers Arch, Beazley, Dale, Hiscox and Munich Re, the insurance be available for a 12-month term beginning sometime in September. (HM Treasury, when contacted by Billboard, was unable to say exactly when the scheme will begin.)
The government says it 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.
Denis Desmond, chairman of Live Nation U.K. and Ireland, says the government-backed protection is a vital intervention that “offers certainty to artists, concert and festival promoters in the live entertainment market.”
“While the new scheme won’t cover all our risk, this intervention will help protect the industry that we all know and love,” says Phil Bowdery, chairman of the Concert Promoters Association.
The program follows the establishment of similar government-backed insurance schemes in a number of other European markets, including Germany, the Netherlands, Belgium, Austria, and Denmark. They provide a much-needed safety net for promoters committing non-recoupable upfront costs for future events amid the uncertainty of a pandemic.
“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,” Sunak says in a statement.
In the event of cancellations resulting from coronavirus restrictions, the government will pay between 95% and 100% of costs accrued with insurers paying the remainder. (Promoters and event organizers will need to pay an agreed excess fee, as per standard insurance deals).
While live execs unanimously welcomed the news, some expressed anger that the government didn’t step in sooner to support the country’s struggling live sector in the way it did for the film and TV industries. A 500 million pounds “Film and TV Production Restart Scheme” has been in place since July 2020 and has provided insurance cover to more than 600 independent film and TV productions to date, says HM Treasury.
“It is devastating that the timings of this scheme could not have been earlier,” says Michael Kill, CEO of the Night Time Industries Association. He points to the large number of U.K. festivals that have been forced to cancel over the past year — many citing the lack of insurance as a determining factor.
According to the Association of Independent Festivals, more than half of all U.K. festivals scheduled to take place in 2021 have been cancelled this year because of the pandemic. Big-name casualties include Glastonbury, BST Hyde Park, Download and Kendal Calling.
Paul Reed, CEO of the Association of Independent Festivals, says the introduction of COVID-19 cancellation insurance was a positive development for the industry. But he cautioned that it doesn’t cover events needing to reduce capacity or cancel due to social distancing restrictions being reintroduced.
Nevertheless, British execs are cautiously optimistic that the tide is now turning for the beleaguered live industry and that better times are ahead.
The U.K. lifted its last remaining COVID-19 restrictions on July 19, opening the door for full-capacity shows, nightclubs, and festivals to return. Latitude Festival, held in Suffolk July 22-25 and headlined by Bastille, Bombay Bicycle Club, Wolf Alice, and The Chemical Brothers, was the first major music event to take place since the end of lockdown. It was attended by around 40,000 people as part of the COVID-19 Events Research Program.
Tentpole events scheduled to take place later this summer include the 185,000-capacity dual-site Reading and Leeds festivals headlined by Liam Gallagher, Stormzy and Post Malone, and the 70,000-capacity Creamfields, which features David Guetta, deadmau5, Alesso and Martin Garrix.