Live events reinsurance – does the Government’s new scheme go far enough?

The events and entertainment industries have been hit hard by the COVID 19 pandemic. Events were postponed or cancelled, causing some venues to shut down for good, and many staff losing their jobs despite the furlough scheme, as companies couldn’t keep afloat. The government announcement on 19 July 2021 that the legal restrictions were over was music to the ears of all those in the entertainment and events industries, finally a chance to start the long road to recovery after the challenge of the previous 16 months. Many live events have since returned, festivals are going ahead, theatres can fill their seats, and musicians are returning to stages. However, the situation isn’t as rosy as you might think.

After a year of financially crippling restrictions and forced cancellations, live event and festival organisers are not in the position to take a gamble to get their events back up and running, so great insurance coverage is more critical than ever. Insurance problems have been cited by a number of festivals as the reason for them not going ahead this year. The launch of the new government scheme to help encourage insurers to cover live events is exactly what is needed. The government are stepping in to act as a reinsurer, meaning events can go ahead with the reassurance that pay-outs are guaranteed to be funded if events have to be cancelled due to COVID.

While this is great news and a really positive step towards getting the sector back on its feet, the devil is in the detail. When you take a look at the fine print, the reinsurance is only valid if the event is cancelled due to another lockdown, not if the event is not feasible due to other COVID related restrictions. This could prove problematic as it seems more likely that there would be a reintroduction of restrictions, such as social distancing, rather than a full lockdown given how far we have come with vaccinations and the low number of hospitalisations due to COVID. Meaning that the reinsurance is not much of a guarantee to events organisers, who could still be at risk of losing out if social distancing restrictions were to be reintroduced. So, although this is an important and valuable step from the government to help get events going again, we aren’t sure that is it enough to give the sector the confidence boost it needs right now. If the government want their scheme to really boost the sector, they need to expand it to cover reintroduction of other COVID related restrictions that would affect the industry.

But the last year has brought out the pessimist in most of us, with massive changes to our daily lives and challenges to our livelihoods, but maybe now it’s time for us to be optimistic? Here’s to hoping that 2022 will be a year full of live events and festivals which gets the industry well and truly back on its feet!