Music festivals and other live events in the UK will be protected by a new government-backed insurance scheme if they're forced to cancel due to Covid-19 restrictions, the Chancellor of the Exchequer Rishi Sunak has announced.

The scheme, worth over £750 million, will see the UK government acting as a "reinsurer," according to the official statement from HM Treasury and the Department for Digital, Culture, Media & Sport – "stepping in with a guarantee to make sure insurers can offer the products events companies need."

"This scheme will support live events across the UK that are open to the general public – such as music festivals and business events," the statement continues. "It will cover costs incurred in the event of cancellation due to the event being legally unable to happen due to Government Covid restrictions."

"The events sector supports hundreds of thousands of jobs across the country, and I know organisers are raring to go now that restrictions have been lifted," Rishi Sunak comments. "But the lack of the right kind of insurance is proving a problem, so as the economy reopens I want to do everything I can to help events providers and small businesses plan with confidence right through to next year.

"We have some of the best events in the world here in the UK – from world-famous festivals to your local fair. With this new insurance scheme, everything from live music in Margate to business events in Birmingham can go ahead with confidence, providing a boost to the economy and protecting livelihoods through our Plan for Jobs."

Julian Knight, chair of the Digital, Culture, Media and Sport Select Committee – a cross-party committee of MPs appointed to scrutinise the UK Government – has issued a response to the announcement, stating that "it is a shame that it has come too late for some this summer". However, he also points out that the scheme "will provide the confidence the sector needs to plan and invest in future events."

Paul Reed, CEO of the Association of Independent Festivals (AIF) – the UK's leading festival representational body – has also issued a statement, noting that "AIF has campaigned for a Government-backed insurance scheme for festivals for over a year."

"We are pleased that Government has listened, and we welcome this intervention to address the insurance market failure," he continues. "It is positive that festival organisers will now have an option for Covid cancellation."

However, Reed goes on to point out that the scheme doesn't cover "a festival needing to reduce capacity or cancel due to social distancing restrictions being reintroduced, so it remains imperative that the Government continues to work with the sector in areas such as Covid certification to try and avoid such an eventuality and ensure that organisers can plan with increased confidence for 2022."