Lloyd’s and the UK Government have unveiled a £750 million live event reinsurance backstop designed to help give certainty to many live UK events.
The initiative which is supported by Arch, Beazley, Dale, Hiscox and Munich Re will see the Government act as a reinsurer and issue a guarantee to ensure insurers can offer products that companies need in order to plan and host events.
The coverage will be available alongside standard commercial event insurance but will cover the costs incurred as a result of cancellation due to COVID. Currently, this is something that is not covered in standard event insurance.
Under the new scheme, in a situation of an event being cancelled due to COVID, once the excess has been covered by the organiser then the government and insurers have agreed a risk share per claim. This will depend on the original exposure of the insurer to that event.
The pandemic has been disastrous for the live-event sectors as many festivals are reluctant to organise an event that may be shut down due to the COVID cases. This lack of uncertainty has resulted in over a quarter of festivals with a capacity of more than 5,000 people being cancelled due to lack of event insurance according to the Association of Independent Festivals (AIF).
The UK Live events sectors is worth more than £70 billion to the UK economy and supports more than 700,000 jobs according to HM Treasury.
During the pandemic, the UK sport and leisure sectors have received more than £1 billion in Government support.
Event cancellation and the contingency market have been among the some of the hardest hit lines of business during the pandemic.