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Up to £300,000 will be made available to organisers should an event have to be cancelled.
Pilot events scheduled to take place include a screening at the Luna Outdoor Cinema in Liverpool, which will be attended by 1,000 people.
The Circus Nightclub in Liverpool will also host an event for 3,000 people, while the FA Cup final at Wembley also forms part of the pilot.
“This compensation policy is limited to the events research programme only.
“It is right to provide assurance to the organisers, given the risk they are taking in helping research to inform the reopening of the economy.
“We are aware of the wider concerns about securing indemnity for live events and are exploring what further support we may provide.”
Digital, Culture, Media and Sport (DCMS) Committee chairman Julian Knight said on Wednesday the announcement of the compensation scheme is a “clear admission that there is severe market failure” in events insurance.
Speaking at the online Let Live Thrive: Crisis Event, he said organisers of all mass gatherings should be able to access a similar compensation scheme.
He added: “We need to ensure that we do not stop in putting the case for this because at some point I am hopeful the dam will break and that we will get it over the line but this has to basically be a constant effort because without it frankly we are not going to see the great festivals and live events not just this year but in years to come because we would have wasted away our infrastructure.”
The Hot Water Comedy Club in Liverpool previously pulled out of the Government trial after it said the Government failed to clarify whether it would involve Covid-19 vaccine passports.
The venue said it was subjected to a “hate campaign” online after reports suggested it was working with the Department for Digital, Culture, Media and Sport (DCMS) to trial Covid-status certification.
More info on Liverpool’s pilot event scheme is due to be announced in the coming days.
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