Chancellor unveils £750m insurance scheme for events
Chancellor Rishi Sunak has announced a government-backed insurance scheme for events worth more than £750 million.
The government has partnered with Lloyd’s to deliver the Live Events Reinsurance Scheme as part of the Plan for Jobs. The scheme will see the government act as a ‘reinsurer’ – stepping in with a guarantee to make sure insurers can offer the products events companies and organisers need.
The scheme will support live events across the UK that are open to the general public – such as music festivals and business events. It will cover costs incurred in the event of cancellation due to the event being legally unable to happen due to Government Covid restrictions.
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 events companies with the option of purchasing cover from next month, alongside standard commercial events insurance.
Rishi Sunak said: “The events sector supports hundreds of thousands of jobs across the country, and I know organisers are raring to go now that restrictions have been lifted. But the lack of the right kind of insurance is proving a problem, so 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.
“With this new insurance scheme, everything from live music in Margate to business events in Birmingham can go ahead with confidence, providing a boost to the economy and protecting livelihoods through our Plan for Jobs.”
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 Government Covid restrictions.
If events do have to cancel, after organisers have covered the agreed excess, the government and insurers have an agreed a risk share per claim. This starts with government paying 95 per cent and insurers 5 per cent, progressing to them covering 97 per cent and 3 per cent respectively and finally government covering 100 per cent of costs. The split depends on the losses incurred by the insurer from the scheme to date.
The scheme will be available from September 2021 and run until the end of September 2022.
Jane Longhurst, chief executive of Meetings Industry Association, said: “Through our ongoing surveillance of the industry we’re acutely aware of the impact an insurance indemnification scheme will have on the sector, with almost two-thirds of venues (61 per cent) surveyed in August 2020 highlighting the need for this to be introduced.
“In the same year, almost all venues (92 per cent) had zero cover for their lost business, of which for the average venue was a significant £2,398,600.
“Providing reassurance to risk-averse event organisers will be critical in the return of more recognisable booking numbers and the stimulation of the sector’s circular economy, benefitting venues, hotels, destinations, caterers and a diverse range of suppliers within the supply chain.
“The recognition of the business meetings and events sector in this scheme is total acknowledgement of the role it has in supporting the UK’s economic recovery, and we’re confident that the sector can now serve as a catalyst.”
Chris Skeith, CEO of the EIA (Events Industry Alliance) said: “The EIA, comprising of AEO, AEV and ESSA, welcome the Chancellor’s announcement of a new Covid Cancellation Insurance Scheme. The exhibitions sector has been significantly impacted during the pandemic with forced cancellations due to government and local authority restrictions. While we understand the necessary public health restrictions that have been in place, the impact on the sector has been devastating. The uncertainty caused by the pandemic has undermined the insurance market for our sector.
“This government-backed insurance scheme will bring some much needed confidence to a sector, and its supply chain, which often acts as the UK’s shop window to the world, and allow the industry to rebuild itself despite the continued uncertainty pandemics bring. Our members provide trading platforms for over 180,000 businesses, fuelling trade and economic impact across the UK and across every market sector, and we look forward to playing our part in driving the UK’s economic recovery. This new insurance scheme will hopefully play an important role in our ability to do that as we reopen in a safe and responsible manner.”
Culture secretary Oliver Dowden said: “Our events industries are not just vital for the economy and jobs; they put Britain on the map and, thanks to this extra support, will get people back to the experiences that make life worth living.”
Published Date: 06/08/2021