Who pays? Concern’s major event insurance scheme is too ambiguous
The ambiguous wording of a program designed to support New Zealand’s major events industry through Covid-19 has left some scratching their heads.
Things understands that the Department for Business, Innovation and Employment (MBIE) is presenting a webinar for major event organizers on Friday to discuss the Event Transition Support Payment Scheme (ETSP).
In light of the change to the red setting of the government’s traffic light system, MBIE was now considering “if there are any implications for the ETSP”, a spokesperson said.
“Ministers will consider advice, and we hope to be able to share further information in the coming weeks.”
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William Geradts, the director of Armageddon Expo, received calls this week from bewildered event organizers across the country who are struggling with their insurance claims.
He is one of the first major event organizers to be paid by the ETSP scheme.
“I had all the men and dog event organizers calling me this week trying to figure out how it works,” Geradts said.
“A lot of people are confused by this. I found the overall process quite smooth. It took about three weeks to pass. Our lawyer made sure all of our i’s were dotted and our t’s were legally crossed out and that was it.
Organizers of the Hamilton Gardens Arts Festival say it is ‘devastating’ to pull the plug, but Covid rules around public gatherings meant it was not possible to hold the event in 2022.
Major event organizers are asking for clarity from MBIE regarding the payment of artists and other event providers under the ETSP program.
There are two main event support schemes.
The Department of Culture and Heritage oversees claims for events with fewer than 5,000 attendees.
He says: “The program includes an obligation to release full payment, as if the event had taken place, to artists, performers and production teams and/or organisations, and the program would now also cover cancellations due to a lead artist getting Covid or needing to self isolate.
MBIE’s ETSP program, backed by insurer Aon and designed to protect events with more than 5,000 capacities, is confusing.
Under its guidelines, eligible event organizers who have registered their event can have “90% of their sunk costs” covered by the government in the event of cancellation or postponement.
The event organizer receives payment for the insurance and then pays sole contractors and operators.
Some have expressed uncertainty as to what constitutes a “sunk cost”.
For Callam Mitchell, director of Team Event, more than a year of work and his entire event season was decimated by the January 23 switch to red.
He canceled four major events in Christchurch in the past week and said event organizers wanted to make sure all of their artists and vendors were ‘equally taken care of’.
“These things are changing on a daily basis, so hopefully the two programs will be more closely aligned with the intent to protect an industry.
“It would be a real kick in the teeth if, after backtracking on both summer jabs [campaign]then backtracking on running red lights only when the healthcare system was overstretched, only to seek to minimize support under the ETSP to an industry that has again been decimated for the foreseeable future.
Entertainment industry stalwart Andre Goldsmith of Newco Events agreed that the wording of the ETSP “causes confusion”.
“There is an ambiguity there. Also, it should be noted that Christchurch residents have a somewhat pessimistic attitude towards insurance companies in general, given their experience with earthquakes.
Things asked MBIE whether a talent royalty, when an artist, musician or sportsperson has signed a contract with a Covid-19 clause, is considered a sunk cost.
“If a performer/performer has a Covid-19 clause in their contract per your example, that would likely not meet the definition of an eligible sunk cost,” a spokesperson said.
MBIE’s website also states: “Non-reimbursable talent fees – e.g. sports, entertainers, musicians, etc. – are examples of sunk costs.”
There are a “number of differences” between the two regimes, the spokesperson said.
“These include that the ETSP is intended for large-scale events with registered or paying attendees of more than 5000; events must also be in-person attendees. ETSP can also cover up to 90% of eligible non-recoverable costs.
“In assessing whether a cost is unrecoverable, Aon considers contractual obligations that may be in place.”
Arts, Culture and Heritage Minister Carmel Sepuloni on Wednesday announced a $120 million funding increase for Omicron’s successful arts and culture business. It included an additional $70.7 million for the arts and cultural events support program, originally set at $22.5 million.