The postponement of Ultra music festival in Miami and the cancellation of SXSW in Austin came in swift succession last week – the first two major music event casualties of a growing panic over the spread of the coronavirus.
Austin mayor Steve Adler pulled the plug on the latter a week before it was due to start, declaring a “local disaster in the city”: SXSW generated $356m (£271m) for the Austin economy last year. California’s Coachella festival, due to begin 10 April, is the most high-profile music event in the US, and if it gets pulled estimates say it could leave a $1bn hole.
The aphorism is that if America sneezes, the rest of the world catches a cold; if Ultra and SXSW cause a domino effect, and music festivals in the UK and Europe are shut down, the economic impact could be enormous. Worse still, most festivals will not have the correct insurance to cover their expenditure and projected losses if the government or local councils order them to cancel.
Festivals in the UK tend to insure themselves to the hilt against bad weather and have had, in the wake of the attacks on the Bataclan in Paris in 2015 and Manchester Arena in 2017, to add acts of terrorism to their policies. Coronavirus falls under what insurance companies term “communicable disease cover”, but almost no festival will have it.
“It is very rare,” says Steven Howell of Music Insurance Brokers. “The only people who tend to buy it are the ones that are concerned about things like foot and mouth or swine flu. I have some clients who buy it every year, but the majority don’t.”
Michael Rawlings, underwriting manager at Event Insurance Services, agrees, saying that outside of animal-based events, “very few people would have had the foresight to have insurance against communicable disease”.
As coronavirus is now a known disease on a global level, clients cannot retroactively add cover to existing policies or try to insure against it in future policies. Communicable disease cover would now specifically exclude coronavirus or any variant of it. “You can’t insure against something that is happening,” says Howell. “If your house is on fire, you can’t then decide to buy insurance.”
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