It comes after UK event organisers said that such a scheme would help provide them with some safety against any cancellations they could be forced to make as a result of the pandemic.
Culture Minister Caroline Dinenage told a Digital, Culture, Media and Sport (DCMS) Committee inquiry into festivals that she is not prepared to look at an insurance package while significant uncertainty remains around live events.
She said: “The fact is, chairman, as the minister responsible for this I would much rather be able to make an announcement when I am absolutely certain things can go ahead, or at least in a much better sense of predictability that things can go ahead, than announce an indemnity scheme, give people the confidence in order to pull the rug out from underneath them again.
“I just wouldn’t be prepared to do that.”
Ms Dinenage added that the pandemic means that “certainty and predictability” have become like “magical unicorns”.
She also batted away the idea of a scheme similar to the £500 million Film and TV Production Restart scheme, saying the sector’s reliance on live audiences would be an issue.
The minister said: “Quite simply, for the reason that there are no live audiences in high-end film and TV production and that is where the risk is – moving large numbers of people around the country.”
Her comments come as Parklife Festival revealed it has sold out its event in September, which had been rescheduled from June.
The Heaton Park event revealed its line up, featuring Brit-award winning Dave and Grammy-winning Megan Thee Stallion, on Tuesday night ahead of tickets going on sale on Wednesday morning.
Organisers say the festival sold out in record time during its pre-sale, meaning there was no need for a general sale.
The BBC has also released its plans for the annual Big Weekend festival – which will not have any in-person gigs this year.
BBC Radio 1’s Big Weekend is dubbed as the biggest free music festival in Europe, and has drawn acts such as Little Mix, Coldplay and Stormzy.
However, this year fans will be able to enjoy more than 100 live sets across the May bank holiday weekend, which the corporation says are designed for friends and family to listen to in “parks, on beaches, in pub gardens or simply from the comfort of their own homes”.
Reading and Leeds Festival and Latitude Festival in Suffolk are among those to confirm they plan to operate as normal this year.
However, others have not been as confident, with Glastonbury and Download already cancelling their 2021 events.