Theatres hit by lack of Covid insurance as London’s West End reopens

The curtain will go up across London’s West End this weekend but a lack of insurance for Covid-related cancellations has left theatre owners and producers shouldering increased financial risks and unable to plan a return to blockbuster shows.

After going dark in November, new three-tier rules in England mean theatres in tier 1 and 2 areas can once again welcome socially distanced audiences. Among the shows opening on Saturday are Six at the Lyric Theatre, in which Henry VIII’s wives retell their stories in the high-octane style of a modern-day girl band, and a concert version of Les Misérables at the Sondheim Theatre. 

Public appetite for live theatre appears undimmed by autumn’s pandemic surge. When booking opened, Les Mis sold 30,000 tickets in a day. But while theatre owners such as Nica Burns, co-owner of Nimax, which has six London venues, say sales are “fantastic”, the financial health of shows is more precarious, with a maximum 50 per cent capacity under the new rules and no insurance cover against business interruption. 

“We’re not viable at 50 per cent. I will lose money. But we’ll be earning a contribution to our costs,” said Ms Burns. 

Producers have mitigated the risks of enforced closure by staging one- or two-person shows, reducing both the health and financial threat. The cast of Six happens to conform to the government’s Rule of Six — the maximum allowed in a social gathering; other productions have pared back the roster of performers. 

But the West End’s biggest shows are likely to lie dormant for months after insurers fled the cancellation coverage market in the pandemic.

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Large-scale shows such as Hamilton or Harry Potter and the Cursed Child draw big overseas audiences and fuel local spending but require three or four months of preparation and a much bigger financial commitment than the smaller productions opening in December.

The maximum capacity allowed for theatres is 50 per cent under new rules © Chris Jackson/Getty Images

When booking recently opened for ‘Les Misérables’ 30,000 tickets were sold in a day © Neil Hall/EPA-EFE/Shutterstock

Edel Ryan, UK head of strategic business development for entertainment at insurer Marsh, said event insurers already faced billions of dollars in losses as a result of Covid-19 claims, with more in the pipeline from agreements struck before the pandemic. 

“Until we’re in a position where we’re beyond further lockdown I don’t think any [insurance] market is going to be in a position to offer terms. It’s unlikely to be available in the near future,” she said.

Fearing that insurance will not return until late 2021 or 2022, the theatre industry is pressing the government — so far without success — to set up an indemnity scheme that would stand behind losses in the event of coronavirus-related stoppages. Ministers have already provided a similar arrangement for film and TV production. 

Martin Scott, chief operating officer at the Society of London Theatre and UK Theatre, the industry body, said: “It is vital that this is in place as soon as possible to create investor confidence, enable forward planning and for shows to go on sale to build an audience ahead of opening. Until this is in place, activity will be at a very low level and on a limited scale.”

The Department for Digital, Culture, Media and Sport declined to comment on the proposals for an indemnity scheme for theatre but said it was “working flat out to ensure theatre performances and other live events can return safely as soon as possible”, adding that hundreds of theatres had benefited from the government’s £1.57bn culture recovery fund and the extension of the furlough scheme.

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The new rules behind England’s tiered system have piled further constraints on regional theatres, dashing plans for Christmas productions and pantomimes in tier 3 cities such as Bristol, Birmingham and Manchester.

In an unheralded move, the government said audiences in all tiers would be capped at 1,000 people or 50 per cent capacity, whichever is smaller. This forced the cancellation of The Nutcracker at the Royal Albert Hall (normal capacity 5,500) and derailed plans at the Les Mis show, since the seats had been reinstalled to accommodate a socially distanced two-thirds of normal capacity.

“The knock-on effect on the business is that what would have been a season to break even will now make a significant loss,” said Nick Allott, non-executive vice-chairman of Cameron Mackintosh Productions. 

The company is going ahead with the Les Mis show even without business interruption insurance, but he worries about the authorities flipping between tiers at the drop of a hat. 

“You can’t turn theatre on and off like a tap. London is in tier 2, which enables us to do Les Mis at a loss, but what happens if they decide to put London into tier 3 after Christmas? Then there’s no theatre at all.”

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