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Wedlock – Deadlock: How your insurance can help you if COVID-19 turns your big day into a big dud

Published: 25 March 2020

Social distancing rules, travel restrictions and recommendations for the vulnerable to avoid social events mean that conventional white weddings are at the moment (to put it mildly) simply not possible.

My own wedding is still due to take place on 6 June 2020 in Croatia. I share my experiences and thoughts below on some of the legal issues that are relevant to couples that do have insurance in place.

Should I cancel the wedding?

This is a question that I am pondering daily, not the marriage you understand, just the wedding!

Your insurance policy is the best place to start before you make this huge decision. The terms set out in what circumstances you can postpone or cancel and still expect to be reimbursed for expenses incurred. My own wedding insurance policy for example states (my underlines):

We will pay … for any irrecoverable expenses incurred by you … of ceremonial attire, flowers, photographs, caterers, transport, accommodation and the services from any other wedding services supplier booked but not used as a direct result of the unavoidable cancellation or curtailment of the wedding or wedding reception as a result of the booked venue for the wedding or wedding reception being unable to hold your wedding due to an outbreak of infectious or contagious disease.”

COVID-19 is therefore almost certainly covered under the wording of this particular policy. However, adhering to the exact meaning of the policy terms is very important if the claim is to be honoured. In connection with the policy wording above, the cancellation must be: (a) unavoidable and (b) a result of the wedding venue being unable to hold the wedding. A unilateral cancellation may not fall within the policy unless government bans such events, or the venue is unable to host the wedding by law.

You should check your contracts with your suppliers and see if they include any express cancellation provisions. Wedding insurers will often only pay out if you have written contracts with your suppliers – so make sure you find and retain them (your written contracts). A general exclusion in my insurance policy reads as follows:

The Insurance does not cover: any costs where no written contractual agreement exists directly between you and the wedding services supplier.”

Where such contracts are agreed by email exchange rather than by a traditional form of contract it may still be possible to claim. However, having a formal written contract will make any insurance claim you have easier to progress. Make sure you can evidence in writing; the Who, the What, the When, the Where and the How Much for the contract.

What about postponing?

Insurance policies will usually cover both cancellation and postponement. A typical insurance policy will reimburse you for reasonable additional costs incurred in rearranging the wedding to a similar standard as the original budget. Insurers will expect services at a rearranged wedding to be of a comparable standard to the original event. Any increased costs of rearranged services should generally not exceed the original invoice costs by more than 25%. If there is any silver lining to having to rearrange your big day, it might be that the rearranged wedding could have an increased supplier budget of up to 25%!

If you want to postpone then the most important thing to do is to communicate, communicate and communicate some more. Speak to your venues, your insurers and your suppliers and make sure you record any revised agreements in writing.

Can my insurer legitimately avoid paying out under my policy by relying upon any other exclusions?

You may have heard by now of Force Majeure clauses (sometimes referred to as Act of God clauses). Broadly speaking, these clauses allow the provision of services or goods under an agreement to be suspended or obligations terminated, due to circumstances outside the defaulting party’s control.

Your wedding insurance policy will most likely have a Force Majeure clause. You should review this to understand whether an outbreak of infectious or contagious disease is included as an ‘Act of God’. The Force Majeure clause in my personal insurance policy does not cover a Covid-19 type event:

The Insurance does not cover: any direct or indirect consequence of war, civil war, invasion, acts of foreign enemies (whether war be declared or not), rebellion, revolution, insurrection, military or usurped power, or confiscation, nationalisation, requisition, destruction of or damage to property by or under the order of any government, local or public authority.”

Insurance policies can contain other general exclusions which may be relevant. An example of an exemption that insurers may wish to rely upon in the current crisis is as follows (my underline):

“This policy does not offer cover when you know, when buying this policy, that there is already a problem that may lead to a claim.”

It is important to read your policy carefully to identify any other such exemptions insurers may seek to rely upon.

What happens if the Venue or my Suppliers go out of business?

These are dark days for all those businesses that rely on wedding relating income. It is a sad fact that some suppliers may go bankrupt due to the impact on their bottom line. Again, check your insurance policy – it should have provisions that relate to financial failure of suppliers. Your policy wording may for example state:

“We will pay up (to the amount stated in the Summary of Cover) irrecoverable deposits and additional costs in arranging alternative wedding services following the bankruptcy or liquidation of any pre-booked wedding services supplier directly contracted to and paid by you.”

If you do not have wedding insurance then in the event one of your suppliers becomes insolvent, it won’t be able to supply the services you paid for. Check your other insurance options (credit card insurance for example) and also contact your bank who may refund you. Let’s all hope the insurers themselves stay solvent!

What are your practical tips from going through this experience yourself?

  1. Communicate with the venue, insurer and the suppliers to agree a way forward together.
  2. Although it is an awful time for venues and suppliers, and where you can, avoid paying any more money until you legally are obligated to.
  3. Read the terms and conditions of your insurance policy carefully.
  4. Be as organised as you can.
  5. Try to be positive and remember everyone is going through this together!

We remain on hand to assist with any concerns that you may have, including the legal implications of coronavirus may have on your milestone moments. If you need any further advice regarding a potential contract dispute or insurance policy, please do not hesitate to contact oliver.hughes@viberts.com

At Viberts we are here with you every step of the way.

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