COVID-19: Next Steps

Iain Beaumont addresses how to mitigate financial risk as coronovirus effects live events.

Postponed imageThe last month has been a particularly turbulent time for the events and hospitality industry. COVID-19 needs no introduction and the impact it is having across the world is reflected in stock indices, government restrictions and media reporting.

Despite the advice and guidance issued by HMG, the media has significantly influenced the way that people are reacting to the outbreak. Across the country we have seen episodes of panic buying at supermarkets and temporary shortages of key essentials.

The wider impact of the virus and public sentiment has yet to be fully realised but it is evident that there is pronounced caution amongst consumers. For those venues and promoters looking to deliver events over the next six months, there is a genuine concern regarding the ability to hold these events when the full impact of the virus is still unknown.

What about insurance?
This is a topic that has had a tremendous amount of attention over the last fortnight but the key clauses you should be focusing on are as follows. As with all legal matters, you should seek advice from a suitably qualified lawyer and the following is for general guidance only.

– Event insurance: Check your policies to see what cover you have and whether you are covered if a third party decides to cancel or postpone an event.

– Communicable disease cover: Coronavirus falls under what insurance companies term “communicable disease cover”. Unless this is cover that you have specifically requested, it is unlikely to be included as standard. When foot and mouth ravaged the UK economy in 2001, some venues, event organisers and suppliers looked to include this cover in subsequent years, but according to the insurance industry, few people opt for it. Nevertheless, do check your policy to ascertain whether it is included. Unfortunately, as COVID-19 is now known and active, you cannot obtain cover retrospectively.

– Force Majeure: Contracts often include a “force majeure” clause. Depending on its terms, the clause may operate to excuse temporarily, or release entirely, a party from its obligations.

–  As the virus has been identified as originating from China, and the WHO has already indicated that it may have been contracted by humans from an animal infected with COVID-19, the disease could be classified as zoonotic, and therefore not an ‘Act of God’, or Force Majeure. However, if the outbreak does fall as an ‘Act of God’, the Force Majeure clause may be valid if this can be directly correlated to your event/venue over the time specified. As with all policies, the authority for the declaration of a Force Majeure event will differ.

– Frustration: Within Common Law, the doctrine of Frustration sits independently from the contract terms. In essence, if there is an unforeseen event which strikes the very root of your event, and thus prohibits the attendance, performance or enactment of the core element of the advertised event, Frustration may well intervene.

However, the legality surrounding the use of such doctrine is likely to be difficult, as it would require all parties to be in a position where no viable alternative was able to be sought in order to be able to run the specified element of an event.  Frustration is therefore likely to be a difficult route to pursue.

Event Suppliers
If you are a supplier of services, equipment or labour to an event this year, you will rightly be concerned regarding the potential impact to your business.

In order to mitigate this potential impact, here are a few suggestions you may wish to consider:

– Speak to the event organiser or venue at the earliest opportunity if you have not done so already. Only by ascertaining their plans will you be able to adapt and overcome. If you are relying on equipment that is stuck in a supply chain, you should highlight this early and prepare for an alternative where at all possible.

– You will have no doubt entered into contracts regarding the provision of your services to an event and therefore will likely have some protection regarding payment. The crux regarding this is most likely to be in respect of receiving payment, and cashflow (on both sides) could present a problem. If an organiser is relying on ticket sales and is highly leveraged against this, you may find that default on your agreed payment terms is the reality. Again, speak to those affected early to understand if there will be any impact on an organiser or venue fulfilling its contractual obligations. It may be beneficial to enter into a mutual arrangement where payments can be staggered or deferred until an agreed time in the future.

– Remaining as flexible and accommodating as you can may help your business in the future, as people are more likely to recommend and refer you to other clients as a result of how you manage your relationships. While it may be tempting to remain tough regarding dates and requirements, this could lead to unwanted and unintended ramifications later down the line. Showing compassion could mean the difference between remaining as a loyal supplier in the future or being ditched from the books.

– If you are working with long established venues and organisers, now is the time to start looking ahead and creating joint marketing and promotional campaigns to ensure that you are able to fill the pipeline in later months and years.

As the situation in the UK and Europe evolves, the advice is likely to become clearer and more defined. It is worth keeping abreast of development via credible news sources and reading industry specific reports such as those produced by the Association of Independent Festivals and Event Industry News.

If you have a specific question regarding COVID-19 and how it may affect your event this year, you are welcome to contact our team directly for further information and support –



Iain Beaumont is founder of consultancy Venues and Ventures, advising landowners and estates on their diversification into events. Iain previously ran the events business for the 16,500 acre Cowdray Estate in West Sussex. Prior to that he was castle director at Powderham Castle, running a large number of outdoor music events and festivals as well as a thriving visitor business.

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