Published: March 2016
Special event cancellation insurance is designed to help protect you in case your special occasion — such as a wedding, bar mitzvah or anniversary party — unexpectedly needs to be canceled or postponed. This type of insurance policy may help reimburse you for event-related costs if, for example, severe weather or covered losses like a fire force you to call off your scheduled event, says the Insurance Information Institute (III).
Event insurance may also help protect you if your event is canceled or postponed due to the death of a major participant or close family member, according to the III. You may also be covered for lost costs if your officiant or a major vendor like your caterer or florist fails to provide promised services.
Important note: You're not likely to find a policy that will cover you if a bride or groom voluntarily calls off a wedding, says the National Association of Insurance Commissioners (NAIC).
With a special event cancellation policy, you typically choose a maximum amount of overall coverage (also known as your "limit," or the highest amount your insurer will reimburse you if you make a claim) depending on the overall cost of your event. You may be required to pay a deductible before the policy will help reimburse you for a covered loss
A major reason you may choose event cancellation insurance is to reimburse you for the loss of nonrefundable down payments if your event is canceled or postponed. If you put down deposits for the event — for instance, for catering, flowers, entertainment, photography, honeymoon travel or accommodations, and your special event is canceled or postponed, this coverage may help reimburse you. You may also be protected if a paid vendor goes out of business before your event.
You should read your policy or speak with your agent for details specific to any policy you might purchase, but other costs that may be covered include:
Event photographs. This coverage may reimburse you for payments made to a professional photographer if he doesn't show up for the job or loses or damages your images before giving you copies.
Special attire. Say your wedding dress is burned while being professionally pressed. This coverage may help pay to replace/repair your specialty clothing.
Special gifts. If a gift intended for your event is lost or damaged, this coverage may pay to repair or replace it. Monetary gifts may be covered up to a specific dollar limit.
Special jewelry. This coverage may help protect your wedding rings, Quinceañera crown or other event-related jewelry if it's lost or damaged during the event. It may also offer protection for a specified period of time after the event.
Military issues. If you must postpone or cancel your event because of a deployment — yours, or that of an immediate family member, active event participant or your officiant — event cancellation insurance may help reimburse you for lost fees.
Professional counseling. If your event's cancellation or rescheduling causes you enough distress that a medical doctor recommends counseling, this coverage may pay for those services.
It's important to know that many policies only insure private events, and policyholders may be required to be U.S. residents. Business, public, sporting and similar events may not qualify for event cancellation insurance. Coverage may not be available if your guest list exceeds a certain number of people, so be sure to follow any requirements outlined in your policy.
Your ability to purchase event cancellation insurance may depend on a few factors, such as how many days away the event is scheduled to take place and where it will be held. Here are some things to keep in mind:
Consider coverage when you sign on a dotted line. The NAIC suggests looking into event cancellation insurance as soon as you begin filling out event contracts. Keep in mind that some insurers won't let you take out a policy more than 24 months before your event or within the final 15 days leading up to the event.
Payment may be due up front. Unlike other types of insurance, you may not have the option of making payments on event cancellation insurance. Your premium may be due when the policy is issued.
Holding your event at your home? The III suggests checking with your homeowners insurance agent to be sure you have adequate liability coverage in case of an accident or other mishap on your property. You may be able to add special event liability coverage to increase your protection during the event.
"Destination" events might be covered. Depending on your policy, your event may be covered if you are a U.S. citizen and the event takes place in certain locations outside the United States. Contact your agent to learn more.
As you know, holding a special event can be a major financial investment. Event cancellation insurance is one way to protect yourself in case an incident outside of your control interferes with your big day.