European governments are setting up Covid-19 cancellation funds to give organisers planning security for events due to take place in the second half of 2021.
As a new wave of coronavirus infections grips the majority of European countries, lockdowns are again preventing social and cultural events from going ahead. While the outlook for the coming months remains glum, the prospects for the second half of the year are brightening up. For one, there is progress being made with the vaccine roll-out, particularly in the UK, which should reduce the threat the virus poses to society. Lifting the spirits further is the financial protection some governments are putting in place in Europe, reducing the financial risk for organisers mostly by offering compensation in case an event needs to be cancelled.
Events, particularly large ones, need a long time to prepare. During a pandemic, the planning has become much more complicated due to the additional measures needed to ensure that events are safe. There is, of course, the option to introduce social distancing measures to prevent the spread of the virus during an event, or/and requiring a negative Covid-19 test prior to attendance. However, rules and regulations keep changing. This is not only making it difficult, but sometimes impossible for event organisers to plan ahead. Unfortunately, the cancellation of large in-person events has become the norm rather than the exception during the pandemic. Despite progress in the vaccine distribution, the risk of having to cancel an event will remain high in the near future.
Perhaps unsurprisingly, insurers have been withdrawing event cancellation cover including Communicable Disease (Covid) coverage, following the lockdown measures in spring 2020 after experiencing a wave of claims. Global event cancellation losses from Covid-19 are estimated to be in excess of £17bn ($23bn), of which circa £10bn is insured, according to The Insurer (opens a new window).
The Coachella Valley Music and Arts Festival due to take place in April in California has been cancelled (opens a new window) for the third time due to the coronavirus pandemic.
In a further blow to the events industry, this year's Glastonbury music festival was also recently cancelled due to coronavirus. It is the second year running that Europe's largest live music event will not go ahead, after last year's 50th anniversary celebration was cancelled due to COVID-19.
Following the cancellation of this flagship event, many others are hanging in the balance. The Reading and Leeds Festivals in August as well as the Download Festival in June are hoping to make announcements by 1 March. The Notting Hill Carnival is preparing “for every eventuality” but has not taken a decision yet. TRNSMT organisers in Glasgow are still optimistic about the event going ahead in July.
However, after the cancellation of Glastonbury, many organisers are doubting whether this year’s UK festival season could go ahead, claiming that a lack of insurance is “the biggest barrier” to their viability.
While the British government is still resisting a commitment (opens a new window) to providing indemnity for the sector, akin to the Film and TV Production Restart Scheme announced in July 2020, other countries have taken action to avoid an even more devastating impact on the sector.
The Dutch government, for example, is reserving (opens a new window) at least €300 million for a cancellation fund to allow event organisers to plan for the second half of 2021 without the financial risk posed by a potential Covid outbreak. The guarantee fund is intended for music festivals, business fairs and sports competitions that attract a minimum of 3,000 visitors and take place in the second half of 2021.
Already in September 2020 (opens a new window) the Austrian federal government announced (opens a new window)a €300 million ‘protective umbrella’ to provide certainty for promoters of concerts, trade shows and other live events. Austria is committed to offering a partial guarantee to cover core costs if an event needs to be re-scaled or cancelled.
Similarly, the German Finance ministry announced (opens a new window)in December 2020 a €2.5bn event cancellation fund to support organisers in case an event needs to be cancelled or scaled down.
The European festival season is approaching fast and the live sectors in the UK (opens a new window), Denmark (opens a new window)and France (opens a new window)are still lobbying hard for government-backed insurance schemes at time of publication of this article.