The UK Government has announced plans for a £750m reinsurance scheme designed to boost the events industry.

The Live Events Reinsurance Scheme, developed along with insurance market Lloyd’s, will be delivered through insurers with events organisers able to purchase cover for Government-enforced cancellation due to the event being legally unable to happen due to Government Covid-19 restrictions, alongside their standard insurance.

A number of prominent insurers in the Lloyd’s market, including Arch, Beazley, Dale, Hiscox and Munich Re, are supporting the scheme which will provide live events companies with the option of purchasing cover from next month until September 2022, alongside standard commercial events insurance.

If events do have to cancel, after organisers have covered the agreed excess, the Government and insurers have agreed a risk share per claim. This starts with Government paying 95% and insurers 5%, progressing to them covering 97% and 3% respectively and finally Government covering 100% of costs. The split depends on the losses incurred by the insurer from the scheme to date.

A statement from HM Treasury said the scheme would give organisers the reassurance they need to plan ahead while also ensuring value for money for taxpayers.

UK Chancellor Rishi Sunak said: “The events sector supports hundreds of thousands of jobs across the country, and I know organisers are raring to go now that restrictions have been lifted. But the lack of the right kind of insurance is proving a problem, so as the economy reopens I want to do everything I can to help events providers and small businesses plan with confidence right through to next year.”

The scheme has been welcomed by leaders from within the sector, who have pushed for further assistance from Government. Just recently, leaders from the theatre sector said Covid-19-related interruption insurance may not be commercially available until at least late 2022. In June, a report by the Public Accounts Committee found that UK festivals may not survive if a government-backed insurance scheme against the risk of cancellation is not made available soon.

Jamie Njoku-Goodwin, chief executive of UK Music, said the scheme will “protect jobs, stimulate activity, and help kickstart the sector into playing a leading role in the post-pandemic economic and cultural recovery”.

He added: “The inability to obtain insurance has already caused many cancellations this summer – these have been devastating for the entire music industry and there were fears that without action we would have seen major cancellations continuing well into next year too.

“This new Government scheme is therefore incredibly welcome news – not just for the millions of music fans who have been looking forward to the return of live events, but also for the tens of thousands of musicians, crew members and wider supply chain workers whose jobs depend on continued live activity.”

However, concerns remain about areas not covered by the reinsurance scheme, most notably changes to capacity restrictions.

Paul Reed, chief executive of Association of Independent Festivals (AIF), said: “It is positive that festival organisers will now have an option for Covid cancellation.

“The scheme doesn’t, however, cover a festival needing to reduce capacity or cancel due to social distancing restrictions being reintroduced, so it remains imperative that Government continues to work with the sector in areas such as Covid certification to try and avoid such an eventuality and ensure that organisers can plan with increased confidence for 2022.”