The game most certainly has changed when it comes to weddings in Australia.
A wedding is now considered “risky business”, especially with the prevalence of ongoing, rapidly changing Government restrictions, which could at any point in time impact the preparation and holding of the ceremony and reception itself.
The extent to which COVID-19 will have on weddings going forward remains to be seen but the question that has popped is whether wedding insurance is something that suppliers should be recommending to their couples.
What is wedding insurance?
Wedding insurance is a form of insurance that protects the policy holder for any loss suffered in connection with their wedding.
What is covered under that insurance is listed in the Product Disclosure Statement of the wedding insurance product offered. More often than not, it includes:
- cancellation, postponement or rescheduling;
- wedding attire and rings;
- wedding gifts;
- wedding supplier failure;
- accidental damage to hired equipment; and
- personal liability.
Wedding insurance is often of interest to certain wedding suppliers who are hiring equipment because any loss or damage suffered to that equipment may be covered by the insurance policy. Further, it can also give some piece of mind to suppliers that in the event that the Couple fall ill, or the wedding is cancelled for some reason (note: we discuss this below), the insurance policy may soften the blow to the Couple and you can be paid.
What kind of coverage is offered?
It is for your Couple to choose what coverage is offered. You cannot assume that just because your Couple has obtained wedding insurance that your goods and services are covered by that insurance. The Couple will have the choice of:
- what they want covered; and
- the claim limits (being the maximum amount that they can claim in any one type of benefit).
It may be prudent that you confirm with your Couple that they have insurance to cover the nature of your goods and services, and confirm with them the claim limit so as to ensure that insurance covers the value of your goods and services.
Is wedding insurance coverage a certainty?
No. You need to understand that while the Couple may have insurance coverage, and that insurance is satisfactory for the goods and services you provide to them, their insurance will always be subject to the policy’s conditions and exclusions contained within their Table of Benefits and Product Disclosure Statement.
There are reasons why an insurance company will not pay a Couple’s claim, even though they may have appeared to be covered for that particular loss. These include:
- The Couple did not disclose to the insurance company important information which would have affected the insurer’s decision to insure them at the time of taking out the policy;
- The Couple fails to make payment of the insurance premiums upon taking the insurance out;
- They may have cancelled the policy without telling you; or
- Loss and damage may exceed beyond the claim limit set by the couple, meaning that your loss is not recoverable by them through that policy.
What won’t wedding insurance cover?
Before feeling comfort that your Couple has wedding insurance, it is important to note some scenarios that insurance won’t assist with:
- Most insurance policies have a waiting period before a Couple can claim, for example, thirty days. If they have obtained insurance within thirty days of booking date, they may not be able to make a claim under that policy;
- Insurance policies rarely cover decisions by the Couple to not proceed with their weddings (including a change of heart or disagreement between you and/or an immediate family member);
- They will not cover any event or circumstance that impacts the wedding where knowledge of that event or circumstance was had at the time of issuing the policy;
- They may not cover situations where the wedding is cancelled but the Couple fails to inform all wedding suppliers of that cancellation within a reasonable period of time;
- They may reject a claim where the Couple have incurred additional expenses (when the postpone) and failed to have these approved by the insurer; and
- They can reject a claim where loss and damage is suffered as a result of wilful or malicious acts, acts of vandalism or deliberate act;
The above are only some examples of when claim of insurance may not be paid. Therefore, insurance is never a certainty.
Will the insurance cover loss and damage which is the fault of the supplier?
Where a Couple has obtained insurance and that insurance covers their personal liability for an accident at their wedding, they will not pay out a claim of insurance where:
- the loss or damage is suffered as a result of the supplier’s acts or omissions;
- incidental food poisoning occurrences related to the wedding;
- injury, loss or damage caused directly or indirectly by inflatable bouncy castles, firearms, fireworks or pyrotechnic devices or effect; or
- aggravated, exemplary or punitive damages or the payment of a fine or penalty by regulatory body (such as liquor licensing).
Its important to note that these are only SOME examples upon which insurance coverage cannot be relied.
Therefore it is critical that your own terms and conditions are drafted in a way which limits your liability and protects you from loss and damage suffered by you resulting from the Couple’s actions.
The Big Question….will insurance cover weddings impacted by COVID-19.
Don’t ever answer this question for your Couples.
All insurance products are different and the answer to this question will be subject to each individual policy offered. We have seen some wedding insurance products state that they cover cancellations resulting from Government directions and some insurance policies clearly state that they do not cover loss suffered directly or indirectly resulting from acts by the Government.
It is safe to say that insurers are hurting from COVID-19 and we have seen insurers take extraordinary measures with respect to denying claims (particularly in the areas of business continuity insurance). A number of cases are currently before the Courts relating to the upholding of policies in the COVID-19 era.
Given the above, it is best that you not make any kind of statement to your Couples about the impact COVID-19 may have on their insurance policy.
Raising the issue of insurance with your couple…..
You should always encourage your Couples to consider wedding insurance. Its prudent business practice. However, it is important to remember that you should not be giving advice in relation to matters for which you are not skilled (or insured) to do. That is, you cannot step into the role of an insurance broker or provider despite the temptation you may have to assist your Couples as much as possible.
You may be held liable for any kind of incorrect advice given. Therefore, it is important to redirect your Couples to their insurance provider, their broker and/or their Product Disclosure Statement for any questions they may have.
Our Top 5 Tips
- Have a strong set of terms and conditions which deal with loss and damage suffered both resulting from your actions, and/or the actions of the Couple;
- Never assume that insurance is in place.
- Make sure you obtain a copy of the Couple’s Certificate of Currency and ensure that they continue to hold insurance right up to the date of their wedding;
- Always direct your Couple to their insurer or broker and do not attempt to clarify any contents of the policy in the event that they need it; and
- Make sure you are covered by your own insurance and be sure that that insurance is adequate to meet your needs.
If you wish to discuss any of the above further, or you would like to have your terms and conditions drafted in a way which provides you assurance that you will be protected in worst case scenarios, please do not hesitate to contact us at Hallett Law (or its sister consultancy business, Event Law).
** PLEASE BE AWARE THAT THE LAW IS MOVING VERY QUICKLY RIGHT NOW. THIS INFORMATION IS NOT TO BE TREATED AS SPECIFIC LEGAL ADVICE AND IS FOR THE PURPOSES OF GENERAL DISCUSSION ONLY**