As the FCA test case unfolds in the high court, theatres have also been impacted by the business interruption saga after failing to secure payouts having been forced to shut at the end of March due to the coronavirus pandemic, now they face reopening without insurance

With lockdown unwinding, British theatres were given the go ahead to reopen on the 11 July for outdoor performances, but many are struggling to cope with social distancing measures or find any adequate insurance at all.

This was the case for Cheshire-based Theatre Clwyd, which was left with no choice but to postpone its annual rock ‘n’ roll pantomime this year after it failed to secure cover.

“With no insurance available for theatres right now, we cannot risk our future, or that of the 140 employees whose livelihoods we are responsible for,” Tamara Harvey, Theatr Clwyd’s artistic director announced on the theatre’s website. 

It follows the government publishing guidance on 9 July for the performing arts sector reopening which includes concert halls and live music venues.

Emerging risks 

There are also new emerging risks for theatre’s to consider, that could have an impact on their ability to get insurance.

Many theatres are listed buidings with old, narrow and small features, making it hard to put social distancing measures in place.

In addition to this, the nature of these buildings means that many theatres could also face heightened risks as a result of a prolonged period of disuse during the lockdown.

Michael Hogg, partner at law firm Kennedy’s, told Insurance Times: “Many theatres are situated in old, often listed, buildings, and a long period of unexpected closure and lack of use probably isn’t the best thing for their structures.”

He urged management to think about the risks that arise from operating in a Covid-19 word.

“As well as protecting the public, challenges will include requirements to protect staff and performers - working with PPE [personal protective equipment] in a tight backstage working environment that is often dimly lit during each performance may create some challenges,” he said. 

“Older buildings might well have deteriorated due to lack of regular use, and problems with the electrical systems (including complex lighting rigs and sound systems) may increase the risk of fire, while water systems are susceptible from bacteriological growth if they are not subject to regular flushing or more aggressive counter measures.

“Even the risks of vermin having more uninterrupted time to gnaw though cables might have increased. Each property is going to be different and need to be checked over thoroughly, but the unexpected closure in March followed by a rush to reopen runs the risk of management making mistakes,” he said.  

Faith Kitchen, Ecclesiastical’s heritage and education director, told Insurance Times that although it is encouraging that theatres have already been allowed to reopen for outdoor performances, it’s critically important that theatres manage the risks and get it right, as especially as many theatres are also preparing to reopen their indoor theatre spaces from 1 August.

“The safety of staff and theatregoers is paramount, and theatres need to work out how best to do this in line with government advice, while recognising there isn’t a one-size-fits-all approach,” she said.

Ecclesiastical has put together a risk guide to get theatres back on their feet and ensure staff work in a safe environment. The broker suggested inspecting properties prior to reopening and reviewing business continuity plans. 

High Court

Insurance Times will be live blogging the FCA test case over the next few days, if you missed day 1-3 catch them all here 

Business Interruption Scandal

Theatres have also been hit hard by the denial of business interruption claims that is currently being tested by the FCA in the high court.

At the beginning of July, not-for-profit organisation Society of London Theatre (SOLT) and UK Theatre warned that 70% of theatres could run out cash by the end of the year after they failed to secure business interruption pay-outs.

The warning followed the government publishing guidance on 9 July as to how performing arts venues could reopen safely.

The announcement also included a £1.57bn rescue package to protect venues like theatres from redevelopment, but many have questions if this goes far enough to save the failing sector.

The government’s guidelines for the performing arts

Culture secretary Oliver Dowden announced that theatres can open for outdoor performances with social distancing in place. Indoor performances can resume with these measures in place from 1 August. 

The following measures should be considered: 

  • All venues need to produce risk assessments and review their cleaning regime
  • Deep cleaning and social distancing systems must be reviewed, which includes floor markings in a way that does not damage the historic fabric of any listed buildings
  • A reduction in venue capacity and limited ticket sales to ensure social distancing can be maintained
  • All tickets must be purchased online and venues are encouraged to move towards e-ticketing for help with track and trace
  • Venues should have clearly communicated social distancing marking in place in areas where queues form and adopt a limited entry approach.
  • Increased deep cleaning of auditoriums
  • Performances should be scheduled to allow sufficient time to undertake deep cleaning before the next audience arrives
  • Singing and the playing of brass and wind instruments in groups or in front of an audience is limited to professionals only
  • Performers, conductors and musicians must observe social distancing wherever possible


Unoccupied property exclusions

Meanwhile, as theatres have been shut since the end of March, some could also be hit with unoccupied property exclusions although some brokers have acknowledged this and adjusted cover.

Kitchen added: “In addition, to support theatres during this period, we have extended the enhanced cover we are providing for those premises that remain closed until 30 August and we’ve also introduced an automatic extension in cover for 30 days beyond renewal to help ensure customers are protected from becoming unintentionally uninsured.

“The changes, introduced in response to the government lockdown, ensure that customers are not unduly penalised for temporary closures solely due to the Covid-19 outbreak. Properties that have temporarily closed due to the pandemic will continue to be covered with no changes to premium or excess.”

Read more…FCA test case could be death knell for brokers PI cover if insurers win 

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financial loss, coronavirus