In recent months, the coronavirus pandemic and subsequent national lockdowns have had a significant impact on the UK economy. Despite the government’s measures to support workers and businesses, many companies struggled to keep their heads above water.
One of the sectors most badly affected has been the live events industry, which suffered significant financial difficulties throughout the pandemic. Even now that the government has relaxed lockdown restrictions, many businesses are still struggling with reduced income.
The government has recently announced that it will be offering financial support. If you work in this sector and want to know more, read on to find out how they are planning to help this industry.
Throughout much of 2020 and 2021, the live events industry struggled due to the lockdowns imposed by the government. While these were necessary for preventing deaths, by slowing the spread of the virus, they also had a profound financial impact.
According to industry sources, the live events sector is worth £70 billion to the UK economy each year and also supports many other businesses in areas such as hospitality, production, and logistics. However, since for several months many companies in this field were deprived of customers, it’s easy to understand why they have struggled so much recently.
Even once the government allowed the live events industry to reopen after 17 May, there were still significant restrictions that they had to follow.
For example, many events had to follow social distancing guidelines and there was also a cap placed on how many people could be there. Attendance was often limited to the lower of:
As a result, many businesses and event organisers struggled financially as, even when they were allowed to open, they made significantly reduced profits.
In July 2020, the government pledged a significant amount of money towards helping the arts through this difficult time. According to figures from the BBC, the Department for Digital, Culture, Media, and Sport’s culture recovery fund totalled £1.57 billion.
While this has been a valuable source of support for many businesses, one of the biggest problems facing the industry has been the difficulty in obtaining cancellation insurance. This is largely due to the uncertainty of whether there will be another national lockdown this winter.
The difficulty has led to issues for many large events in recent months. Several festivals, such as Boomtown and Womad, have cited this problem specifically as a key reason for their decision to cancel this year’s shows.
Chancellor Rishi Sunak was quoted on the government website as saying that since the “lack of the right kind of insurance is proving a problem” for many businesses, this is how the treasury could support them. As a response to the sector’s issues, in August the government launched a new scheme to help the live events industry.
To give businesses in this sector a greater degree of certainty for the future, chancellor Rishi Sunak has announced a government-backed insurance scheme worth £750 million. The treasury is partnering with a number of prominent insurers in the Lloyd’s market to provide this scheme, including Arch, Beazley, Dale, and Hiscox.
This will give events companies the option to purchase cover, alongside standard commercial events insurance, which can protect them if events are cancelled due to another lockdown.
Essentially, with this scheme the government will agree to act as a reinsurer, guaranteeing that any payouts will be funded.
While it’s unfortunate that this scheme was not available before the summer, when many events needed it the most, it may be useful for providing a greater sense of confidence and stability. Now that businesses will be able to have that vital safety net of cancellation insurance, they can start to plan ahead for the future.
However, there has been some criticism of the scheme. Greg Parmley, chief executive of the industry association Live, was quoted by the BBC as saying that while the announcement was good news, the “devil was very much in the detail”.
Some critics have raised concerns that the new scheme will only pay out if events are banned due to another lockdown. For example, the Musicians’ Union has pointed out that a “major problem” with the scheme is that it doesn’t cover events that would become uneconomical if social distancing measures were reintroduced.
While this scheme may provide invaluable support to businesses in the live events sector, there isn’t currently a great deal of information available. If you want to know more about whether your business could benefit, you may want to keep an eye on the government website for any updates.
One of the most important lessons that the past few months have taught us is that having comprehensive cover in place can be invaluable for when the unexpected happens.
Protection can not only give your business greater financial resilience, but it can also give you a greater sense of confidence and more peace of mind to know that you will be able to overcome any obstacles that you may encounter.
If you want to protect your business from the unexpected, but you aren’t sure which types of cover may be the most helpful for you, we can help. Email email@example.com or use our contact form to request a call back from our team.