Live events will be covered by a £750m insurance scheme backed by the government in a bid to stop cancellations over COVID-19.

Industry figures have long called for the government to step in after finding that insurers would not cover them for losses caused by the pandemic.

Many organisers campaigned for a scheme guaranteed by the state that would allow them to plan events without risking financial ruin.

The government announced it has partnered with Lloyd’s to deliver a new Live Events Reinsurance Scheme, which will be available from next month and run until the end of September 2022.

Insurers will receive a guarantee from the government which will allow them to offer products to cover organisers if state restrictions shut events down.

Labour’s shadow culture secretary Jo Stevens criticised the scheme, saying it was the “bare minimum”.

She said the scheme was limited to covering a lockdown and would not apply to scenarios like the reintroduction of social distancing or artists and crews having to self-isolate.

“Yet again the government has dithered, delayed and come up with a solution that doesn’t address the problem,” she said.

“Under this scheme, the government essentially takes no risk and the live events sector carries it all.”

The scheme will be available for the live events sector, which the Treasury said was worth more than £70bn to the economy each year and supports more than 700,000 jobs.

Chancellor Rishi Sunak said the scheme will allow “everything from live music in Margate to business events in Birmingham” to go ahead, providing “a boost to the economy and protecting livelihoods”.

He said: “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.

“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.”

Culture Secretary Oliver Dowden added: “Our events industries are not just vital for the economy and jobs; they put Britain on the map and, thanks to this extra support, will get people back to the experiences that make life worth living.”

Jamie Njoku-Goodwin, chief executive of music industry body UK Music, said the scheme is “incredibly welcome news” for millions of music fans, performers, and those working in the sector.

He said: “The inability to obtain insurance has already caused many cancellations this summer – these have been devastating for the entire music industry and there were fears that without action we would have seen major cancellations continuing well into next year too.”

Commons Digital, Culture, Media and Sport Committee chairman Julian Knight welcomed the move, saying: “Though it is a shame that it has come too late for some this summer, this scheme will provide the confidence the sector needs to plan and invest in future events.”

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