Sam Barrett looks at what the insurance market is doing to help get live events back on the calendar post-Covid
From sports events to theatre productions and festivals, the pandemic has forced organisers to cancel many entertainment events during the last year or so. But with pilot events showing what’s possible; support from the government and insurers; and plenty of creative spirit, there is optimism that at least some shows will go on.
A calendar of cancellations has hit the contingency market hard. “There have been some unimaginable losses as a result of Covid-19,” says Edel Ryan, senior partner at Marsh. “There could be further losses too. Large sporting events are often awarded several years in advance, so there are still events out there that are covered for cancellation due to a pandemic.”
Cautious contingency
While insurers have little option other than to accept claims if these events do end up being cancelled, they acted quickly to minimise losses when the risk of a pandemic started to emerge. Covid-19 exclusions were introduced on contingency policies last February, with this broadened to communicable diseases by March.
This move, coupled with lockdown, had devastating effects on the events industry. “We do a lot of sport, entertainment and gameshows on television and everything stopped between last March and August,” says Matt Helm, contingency practice leader at CFC Underwriting. “It is slowly coming back and we have seen more enquiries in the last few months.”
With Glastonbury granted a licence for a one-day festival in September for up to 50,000 attendees and no camping, it looks like 2021 could be the year of smaller, more grassroots events
For those prepared to seek cover, the scale of the losses insurers have seen, coupled with the hard market, mean capacity is down and rates are increasing. “The market felt rates were too low before Covid-19, especially for festivals,” says Ms Ryan. “It is difficult to say whether rates have doubled or more, as risks are looked at on an individual basis.”
Cancellation crisis
Although some events would have gone ahead without insurance in the past, the possibility of cancellation due to Covid-19 restrictions means many felt unable to take this risk. Glastonbury, Boomtown and Download festivals are among those that have pulled the plug on their events this summer. Matthew Meredith, partner in special risks at Gallagher, is not surprised. “From the day a festival closes, they start working on the next year’s event. These are multimillion-pound undertakings that require a huge amount of infrastructure: the organisers cannot make this commitment if they can’t secure cover or have the certainty that the event will go ahead,” he explains.
This level of forward planning means other events are looking precarious too. In April, Sir Brendan Foster, the founder of the Great North Run, said that without the certainty of insurance there were questions over this year’s race.
Creative adaptations
It has not always been necessary to cancel though and some events have adapted to enable them to continue. Sports including football, rugby and golf have successfully, if not quite as boisterously, carried on behind closed doors, and virtual marathons and 10k runs have taken the place of race days.
The TV and film sector has also pivoted to enable productions to carry on in a Covid-secure way. “To keep going, many productions were really creative,” says Ms Ryan. “Fewer locations, with more focus on the UK rather than overseas, longer hours and lots of rules around safety and testing have enabled productions to carry on through the pandemic. Some productions have even substituted a love interest with the actor’s partner to enable some of the more intimate scenes to go ahead.”
An actor’s partner and some creative thinking may have saved the day for some events but where this has not been possible, there are fears about the future. “Some events are facing a second year of cancellations,” says Adrian Thomas, executive director, contingency at Aon. “Once is a disaster but twice is an utter catastrophe.”
The support required to stage many events makes them particularly difficult to put on hold long term.
“The ecosystem around a festival is enormous, with many people who have made live events their life,” says Mr Meredith. “Some of these people will have taken other jobs; they cannot take the uncertainty when they have mortgages to pay. It will be hard to get up and running again without them.”
With theatres closed, the UK performing arts sector is also concerned about its long-term viability. In 2020, the Society of London Theatre, together with around 100 actors, writers and directors, sent an open letter to the government stating that British theatre was on the brink of ruin and faced an existential threat.
Cancellations also hit the wider economy hard. Whether it is a catering truck at a festival, a hotel taking bookings from people who need an overnight stay when they go to a concert, or a farmer renting out a field for a festival, the cancellation of an event has wide repercussions.
Government support
With so much at stake, the government is helping event organisers understand what’s possible by staging a series of pilot events. These have included the FA Cup Final at Wembley in London, in front of a crowd of 4,000; a business event in Liverpool with 1,000 people; and a nightclub in Liverpool with about 3,000 attending. The delayed Euro 2020 football championships also now have fans in attendance, with several games played at Wembley.
By gathering evidence associated with different settings and approaches to managing and mitigating transmission risk, the government will be able to set parameters for future events.
Mr Helm says this is helpful and he is hopeful that it will mean more events can be run after June. “A country fair or an exhibition is relatively easy to control but, with a football match, the organisers will have to think about the risks associated with people travelling to it, particularly where everyone is coming through a tube station at the same time.”
Insurance certainty
Having these parameters is not a perfect answer though, especially where reduced capacity or additional safety measures mean an event is no longer financially viable. Subsequently, there have been calls for a government-backed insurance scheme to deliver the certainty required to stage an event.
There is already an example of this with the Film and TV Restart Scheme, which was launched in July 2020. Backed by the Department for Digital, Culture, Media & Sport and HM Treasury, this is a £500m scheme for UK film and TV productions struggling to get insurance for Covid-related costs.
Marsh administers the scheme and Juliet Birrell, assistant vice-president and knowledge manager for Marsh’s sport, entertainment and media industry team, says it has been incredibly successful. “Where the finance behind a production has been reluctant to commit in the absence of insurance, this scheme has been able to give confidence back to the industry. It’s helped to create 40,000 jobs and covered more than £1bn in production costs,” she explains.
But with pilot events and a vaccination programme being rolled out, not everyone believes the government is likely to replicate this in other areas of the event industry. “It is difficult for the government to do more than it is at the moment,” says Mr Thomas. “It would be great if it could but there are lots of other industries facing going bust as a result of the pandemic.”
However, he is optimistic some events will get the go-ahead this summer. “Restrictions could mean that festivals are more local, with only domestic artists on the lineup,” he says. “There is huge pent-up demand to get back to live events and a lot of people trying to figure out a way to make them happen.”
And with Glastonbury granted a licence for a one-day festival in September for up to 50,000 attendees and no camping, it looks like 2021 could be the year of smaller, more grassroots events.
Sam Barrett is a freelance journalist
