Australian Events Industry Looks to UK Insurance Scheme
As the Australian events industry continues to be tested by the pandemic and various local government restrictions, the UK and others are implementing sector recovery measures. As people look ahead to “living with COVID-19”, these strategies aim to support economic growth and boost business confidence.
UK announces government-backed insurance scheme for events industry
The UK government has recently announced a new reinsurance scheme to help support the recovery and growth of the UK live events sector. The government-backed scheme is worth over £750 million (AU$1.4 billion) and aims to offer event organisers confidence that event cancellation coverage will be available if an event is unable to go ahead as a result of COVID-19 restrictions. As with all insurance contracts, certain terms and conditions will need to be met as part of the coverage.
Globally, nearly all event cancellation insurance policies currently exclude communicable disease outbreaks within the policy wording. COVID-19 was incorporated into communicable disease exclusions at the initial stages of the pandemic in 2020. The UK government-backed scheme will enable event organisers the ability to plan upcoming events without fear of losing sunken costs due to government-imposed COVID-19 restrictions.
From September 2021, UK event organisers will be able to buy extra insurance against cancellation due to government COVID-19 restrictions, subject to their already having standard event cancellation insurance cover in place purchased from the same participating insurer(s).
The additional cover aims to protect an event’s sunken costs only, and will be available from Lloyd’s of London syndicates, with the UK government acting as the reinsurer.
The scheme follows similar government-backed business interruption initiatives designed for the entertainment industry that have been implemented in several countries including, Germany, Austria, Netherlands, Belgium, Norway, and Denmark.
Local landscape: Government support for the Australian event and entertainment sector
As the vaccination rollout ramps up in Australia, many industries are looking at ways to recover and inject growth back into businesses that have suffered during the pandemic.
A collaborative and consultative approach among industry bodies and local governments is vital to ensuring that a supportive and practical pathway is built for industries, such as the Australian event and entertainment sector, to get back on their feet.
To date, the Australian government has provided support to the sector through individual grants and funding to non-for-profits during the pandemic. On August 10, 2021, a further AU$20 million in funding to Support Act was announced. The latest round of funding will assist workers in the music and performing arts industry whose livelihood continues to be impacted by the COVID-19 pandemic.
The Western Australian Government recently opened up applications for their Regional Events Scheme for 2022-2023. The initiative supports smaller and developing events by offering grants from AU$5,000 to AU$40,000 for successful applicants, with a total of AU$1 million in available funding.
Although local government funding initiatives have provided some level of assistance to the struggling events and entertainment sector, they are not the same as the UK scheme, which is an insurance-based solution.
An insurance scheme will likely offer more certainty on coverage and therefore reimbursements. In contrast, access to grants and funding from the local VIC and WA government schemes rely on individual applications and case-by-case assessments.
Given the existence of the communicable disease exclusions, organisers may be wary of scheduling events due to the inability to recuperate sunken event costs if the event is cancelled or adversely impacted by COVID-19 related government restrictions.
Many Australian industry representative bodies have highlighted the need for further government support to help rejuvenate local economies. Live music and entertainment bodies have specifically been calling on the federal and state governments to establish a live entertainment business interruption fund, much like the recently established UK insurance scheme. Australian event organisers will continue to be challenged by COVID-19 and the correlating government restrictions until a new norm of living is established.