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Law360, London (July 29, 2020, 2:12 PM BST) -- The government has launched a £500 million ($650 million) fund to support British television and film productions halted because they cannot get insurance, as it seeks to jump-start the battered arts and culture sector.
The film and TV production restart scheme, announced Tuesday, will allow the government to effectively act as a commercial insurer for the sector, selling cover in exchange for a premium. The aim is to get around the growing problem of insurers introducing exclusions to policies on COVID-19 as they attempt to minimize their liabilities.
Productions must be able to prove they have been denied insurance, preventing them from continuing with filming, to qualify for protection under the government program.
"This targeted scheme, which will help fill the gap created by the lack of available insurance, will help protect tens of thousands of jobs, from actors and directors through to camera operators, costume designers and runners," Rishi Sunak, Chancellor of the Exchequer, said.
The fund will compensate productions after they have restarted, and only when they incur costs because of delays or they have to abandon a shoot because of the pandemic.
The measures, which are still subject to state aid approval, will cover costs from delays up to a value of 20% of the production budget. Productions that have to be abandoned will be covered for up to 70% of the budget.
However there will be a total cap on claims per production of £5 million. Producers will have to pay an excess to claim under the scheme, as well as a premium to join up. Film-makers will also have to buy standard insurance to cover losses caused by factors other than the coronavirus.
The measure is temporary and will run until June 2021, although it will be possible to backdate claims.
Regulators are considering how to close a gap that has emerged as insurers withdraw cover from the market or introduce exclusions.
Lloyd's has weighed whether to create insurance policies designed specifically to provide cover against the coronavirus. And the sector is creating a state-backed reinsurer to handle business interruption claims arising from the pandemic, similar to the domestic terrorism reinsurer, Pool Re.
The European Insurance and Occupational Pensions Authority outlined several options for providing pandemic insurance on Tuesday, including a regional pool reinsurance scheme backed by guarantees from the European Union.
--Editing by Ed Harris.
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