NOVEMBER | FEATURE
The backup plan
A major legal case has ruled in favour of insurance policy holders in the events industry , but should the government be providing insurance to allow events to go ahead ?
Words : Stuart Woods
In the uncertain era we are currently living in , insurance for live events has gone from being a box to tick to a lifeline which cannot be taken for granted .
At the beginning of October , protesters in Parliament Square demanded , among other things , a government-backed insurance scheme to protect fledgling live events during the pandemic . Some of them had been burned by last minute cancellations , and insurance policies which were not paid out .
Earlier in September , the UK ’ s High Court ruled in favour of a group of policy holders , many of them from the events industry , in a series of cases against major insurers Hiscox and QBE . The two insurers have not paid out many policies for ‘ business interruption ’ to music venues , bars , clubs and pubs that had to shut down or cancel events .
Peter Tilsed , director of Luker Rowe insurance brokers , says that insurers are looking to capitalise on some uncertainty around the meaning of ‘ business interruption ’: “ Insurers have always maintained that it was never their intention to pay out for pandemics . Quite simply in a worst-case scenario , many would not have sufficient funds to make payments for such substantial losses . The court will of course say that intention is irrelevant , and what the policy wording states is the important issue .”
The cases were brought to the High Court by NDML Insurance Broker and the Financial Conduct Authority ( FCA ), on behalf of the Night Time Industries Association ( NTIA ), which represents many of these policy holders . In total four cases went to the High Court : one against Hiscox , which was ruled in favour of policy holders , and three against QBE , two of which ruled in favour of policy holders .
None of these policy holders have yet received any money . The legal process is a long one , although it is being expedited as much as possible . NTIA CEO Michael Kill says the next step is an appeal from the insurers , which is being ‘ leapfrogged ’ to the Supreme Court : “ We ’ re just waiting to understand which insurers are going to appeal at the moment . The FCA may also appeal the QBE case which was lost .”
The amount of the payout ( the ‘ quantum ’) is still to be decided , too . Some insurers are arguing that government grants and furlough money which policy holders have received should be deducted from their insurance payouts – something which the FCA has said it will not look kindly upon .
The next step is an appeal from the insurers , which is being ‘ leapfrogged ’ to the Supreme Court
NTIA CEO Michael Kill
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