On 5 August, the government announced that it is partnering with insurers to offer a cost indemnification insurance scheme which will make cover available against the cancellation, postponement, relocation or abandonment of events due to new UK Civil Authority restrictions in response to COVID-19.
The Live Events Reinsurance Scheme will support live events across the country — such as music festivals, conferences and business events — that are at risk of being halted or delayed due to an inability to obtain COVID-19 cancellation insurance. Cover will be available to purchase alongside standard commercial events insurance for an additional premium.
This intervention will support the UK’s economic recovery from the COVID-19 crisis by giving events the confidence they need to plan for the future, whilst also ensuring that we deliver value for money for taxpayers.
We have taken care to ensure that the product offered is closely aligned with those available on the market prior to the COVID-19 crisis. Key features of the scheme are as follows:
- The Live Events Reinsurance Scheme is a cost indemnification scheme which protects against costs incurred due to the event being legally unable to happen due to new government COVID restrictions.
- The scheme will cover live events that are open to the general public and are physically located in the UK. This includes live music events, festivals, sports events, trade shows and business events. Private events such as weddings and parties would not be covered.
- In order to be eligible, event organisers must purchase the relevant cover from participating insurers within the scheme. Event organisers must also have or purchase a standard events cancellation policy (or a policy which includes event cancellation coverage) provided at least in part by a participating insurer – the cover backed by the scheme will not be offered on a standalone basis.
- Premium is set at 5% of the total value of insured costs (plus Insurance Premium Tax).
- Claims will be subject to an excess of 5% of the value of the insured costs or £1,000 (whichever is higher) per policy.
- Event organisers can purchase cover up to the full cost of their event, irrespective of when those costs are incurred.
- Cover must be purchased at least 8 weeks prior to the event taking place. This requirement will however not apply for the first 12 weeks of the scheme.
- The government’s expectation is that participating insurers will pay no brokerage in connection with the scheme and no deductions for such brokerage will be made to any premiums paid by insurers to DCMS in connection with the scheme.
The scheme will not cover loss of revenue prompted by lower demand for tickets or venue capacity, and the scheme does not cover self-isolation of staff or performers. The scheme will cover a limited series, or run, of linked events, provided that the event organiser specifies which event dates from that limited series, or run, require cover and how much cover they are purchasing for each.
The Scheme will run to 30 September 2022 with a review point in Spring 2022. Cover will be available to purchase through participating insurers. A number of prominent insurers in the Lloyd’s market, including Arch, Beazley, Dale, Hiscox and Munich Re are supporting the scheme, and we expect more to follow. Event organisers can now start approaching these insurers to discuss their cover.
We will be periodically reviewing the scheme to make sure it achieves its objectives to support live events following the impacts of COVID-19.