Last week the government announced an insurance scheme to support live events, including theatre, whereby a Covid-19 top up would be available to be purchased alongside standard cancellation and business interruption insurance. The government announcement is contained in the following link:
Whilst the recognition by government of a market failure in providing Covid-19 cover is to be welcomed, the details of the scheme, which will operate until end of September 2022, reveal some shortcomings for our sector which we continue to raise and discuss with government.
The scheme covers cancellation, curtailment and abandonment and applies as a result of “the introduction of new UK Civil Authority Restrictions (e.g. lockdown) relating to Covid 19”. Therefore it is limited to when a national or local government applies a (new) restriction, either in the form of guidance or a legal measure.
The limited scope gives rise to significant concerns. Firstly that social distancing measures are excluded – so there is no cover in this for reduced capacity. The government approach to future rising cases focuses on certification rather than applying social distancing caps and restricting capacity. Secondly there is no cover for cases where cancellations occur due to cast or crew having Covid or otherwise having to self-isolate (the “pingdemic”) which is impacting many productions currently. The government feel that the mitigation for this will come with the change of rules regarding those who have been double vaccinated not having to self-isolate from 16th August.
The other main area of concern is the announced premium of 5% + IPT (i.e. 5.6%) which, although negotiated down from the initial proposal, is still a significant sum on top of other insurance. It comes on top of the premium required to have the basic cancellation insurance in order to qualify for the top up, taking the overall premium to around 8%.
To illustrate the potential cost:
Assume that there is an extended run of a show costing £300k per week, and that the cover you as a producer wanted to insure against is a possible 8 week lockdown/prohibition from performing i.e. you want an insurance policy with a cost cap of £2.4m. You also plan to take out a standard cancellation insurance policy for the same period and with the same cap. The cost of this would be £192k, being 8% of what is covered, for the two policies combined.
This short survey is designed to establish the sector’s appetite for taking the additional Covid-19 top up insurance. It will provide us with important data to inform our continuing discussions and lobbying in relation to the effectiveness or otherwise of the scheme for us.
Please would you complete the survey by 5pm on Wednesday 18th August.
