Final details of £800m Live Events Reinsurance Scheme revealed
The Government has officially launched the UK Live Events Reinsurance Scheme to reduce the financial impact for planners if events are cancelled, postponed, relocated or abandoned due to UK COVID-19 restrictions.
The Live Events Reinsurance Scheme, which was announced on 6 August and launched on 22 September, will support live events across the country, including festivals, conferences and business events, that are at risk of being halted or delayed if they can’t secure COVID-19 cancellation insurance.
The cover will be available to purchase alongside standard commercial events insurance for an additional premium and will be available until September 2022.
The government has partnered with Lloyd’s Market Association to deliver the 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 need. Insurers Munich Re, Beazley, Arch, Dale, and Ark are participating in the scheme.
Events Industry Board chair, Michael Hirst OBE said: “The Live Events Reinsurance Scheme provides a much-needed boost to event organisers to plan future events with greater confidence. Both business and leisure events are set to play a major role in the recovery of the UK economy and event organisers are eager to take advantage of growing demand and optimise business opportunities.
“This welcome initiative from Government will ensure the remaining schedule of events for 2021 and those planned for 2022 can go forward with greater certainty.”
Key features of the scheme include:
- The Live Events Reinsurance Scheme is a cost indemnification scheme that protects against costs incurred due to the event being legally unable to happen due to new government COVID restrictions.
- If events do have to cancel, after organisers have covered the agreed excess, the government and insurers have an agreed risk share per claim. This starts with the 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 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.
- 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 that 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 per cent of the total value of insured costs (plus Insurance Premium Tax).
- Claims will be subject to an excess of 5 per cent 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 eight 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 Department for Digital, Culture, Media & Sport in connection with the scheme.
Culture secretary Nadine Dorries added: “The pandemic has been a unique challenge to live events, from gigs to business conferences. It’s a huge relief that so many are now back up and running, but it is crucial that they can also plan for the future with confidence and this scheme helps them do exactly that.
“With the sector contributing over £70 billion annually to our economy, it is right that we do all we can to support it and the talented people that work in it.”
You can find all the details of the Live Events Reinsurance Scheme here.
Published Date: 24/09/2021