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Law360, London (June 23, 2021, 3:52 PM BST) -- Music festivals scheduled in Britain for this summer are facing an existential threat because of a failure by the government to provide state-backed cancellation insurance, lawmakers warned on Wednesday.
The parliamentary Public Affairs Committee said the government has not even properly weighed the potential cost of providing a taxpayer-funded insurance safety net to event organizers.
Most insurers have introduced COVID-19 exclusions to their policies, meaning that losses arising from events canceled because of a third wave of the coronavirus would be borne solely by organizers. Musicians and trade bodies have urged the government to step in with some form of state-backed cover, which would allow festivals to go ahead.
"The government must urgently consider support other than cash, such as insurance indemnity or parts of the sector risk a second summer of forced inactivity with all the devastating consequences to their survival," Meg Hillier, chairwoman of the committee, said.
The committee made the recommendation in a report into the Department for Digital, Culture Media and Sport's rescue efforts for the arts and entertainment sector during the pandemic. The cross-bench panel heard from government representatives that the DCMS had not yet considered the potential cost of a state insurance scheme to protect festivals.
"Festivals are making difficult decisions about whether to risk their survival by going ahead this summer, but DCMS has not modeled the cost of underwriting festival indemnity insurance," the committee said in its report.
The Association of Independent Festivals said in May that 47 of Britain's largest 179 festivals have pulled the plug because of a lack of insurance for cancellations brought about by the pandemic.
A spokesperson for DCMS said festival owners had already received £34 million ($47.5 million) through the government's culture recovery fund.
"We are aware of the wider concerns about securing indemnity cover and are exploring what further support may be required when the sector is able to reopen," the spokesperson added.
The government launched a £500 million insurance scheme for film and TV studios in December 2020 to cover cancellation or delay costs arising from the COVID-19 lockdowns.
MPs on the parliamentary digital, culture, media and sport committee have urged the government to provide a similar scheme for the live music sector.
But Economic Secretary to the Treasury John Glen said in a letter to the committee in February that the time is not right, adding that "professional film sets can more easily be made COVID-secure than public events."
--Editing by Joe Millis.
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