PF&M at a Glance
Mary’s special day was nearly here. Nearly 14 months of planning was just a few short days away—her dream wedding! She had the perfect, custom-fitted gown and train, beautiful bridesmaids dresses, the city’s best caterer, the right menu, a customized cake and one of the area’s most popular dance bands for the gala reception. She was looking forward to a wedding that her family and friends would talk about for years!
Then—a phone call from her parents, and her face falls as she hears the news. The beautiful, historic church that she had selected for her wedding has suffered a fire, and it will not be available. Mary is crushed! It was the perfect setting! The foundation for the whole event!
What just happened to Mary is something that can derail any sort of special event. A wedding is a type of special event that is highly vulnerable to unanticipated occurrences that could cause its delay or cancellation. Although the recent economy has affected even weddings, causing many to scale back costs, these events are still very expensive. Wedding insurance is designed to help handle loss associated with such delays or cancellations. Delays or cancellations can result in loss of deposits than can run into the tens of thousands of dollars.
Wedding insurance is a type of specialty insurance offered by companies that use their own forms and who have a given amount of expertise in writing this protection. Because no standard policy forms are used, coverage and limitations can vary substantially among different companies. Rating the coverage is highly dependent upon obtaining accurate information on the application. Typically, a wedding insurer will treat the application as a warranty, meaning that it can take serious underwriting action if the information is not correct or is missing material facts.
As is the case with many other types of coverage, wedding policies usually contain terms that have their own definitions. Typical terms include participants, honoree, destination reception, event, event photographs/videos, extreme weather conditions, gifts, special attire and other items. Coverage and limitations are applied in direct response to the defined terms.
At a minimum, a wedding policy provides event cancellation coverage. Under this protection, the insured can recover certain non-refundable expenses if the wedding is canceled or postponed. However, coverage is triggered only when the interruption is caused by a source identified in the policy. Eligible expenses usually include facility rental deposits and fees, catering costs, clothing rental, photographer/videographer fees, hotel and transportation costs. The expenses must be related to the wedding, such as the ceremony, reception and the honeymoon. Any coverage is constrained by the policy’s applicable insurance limits.
Often coverage is written in a fashion similar to a special form policy, paying out for any source of interruption that is not specifically barred from coverage in the policy. Exclusions usually include “previously known circumstances,” extreme weather, running out of funds, labor unrest, riots, actions of civil authorities, “cold feet,” bodily injury due to participating in dangerous activities and other causes.
Naturally, coverage ends when the event takes place (or may extend to cover honeymoon travel). Coverage may also be available to handle added expenses caused by making alternative plans for salvaging an event, such as hiring a different caterer or renting a more expensive facility.
Besides event cancellation coverage, a wedding policy may be broader, including liability protection to respond to loss suffered by third parties or their property. Coverage may also include payment for loss involving jewelry, photographs and videos, rented clothing, wedding gifts, and other rented property (such as PA equipment used at the reception). Photograph and video coverage often pays some costs involved in recreating event footage (paying travel and lodging costs for the wedding party for another photo/taping session). These coverages usually have their own set of conditions and limitations.
Wedding policy liability coverage usually protects the insured against claims and suits involving bodily injury (such as a guest who is injured while coming off a podium after delivering a toast) and property damage (a relative of the insured who volunteers to check coats destroys a guest’s fur coat). Medical payments coverage may also be provided.
The policy’s other conditions and provisions are usually quite similar to those found in many other types of property and liability forms.
Please note that this is only an overview of this coverage. A thorough discussion of the program may be found in the PF&M Analysis from The Rough Notes Company. Producer Online subscribers, please refer to the PF&M article “Wedding Insurance Coverage Analysis,” under the Specialty Lines Section for more details on this topic.