Holding a special event often requires a significant financial investment, and a sudden cancellation or postponement could be devastating. If an incident beyond your control interferes with the big day, event cancellation insurance offers useful financial protection.
What Does Event Cancellation Insurance Cover?
Event cancellation insurance is a type of insurance that can cover the expenses incurred should a special occasion such as an anniversary party, bar mitzvah or wedding need to be cancelled or postponed unexpectedly as a result of circumstances that are beyond a person’s control.
This may include a death in the family or adverse weather, among other causes. This type of insurance may also cover lost costs in the event that a major vendor – such as a caterer, florist or officiant – fails to provide the agreed-upon services.
How Does Event Cancellation Insurance Work?
With most special event cancellation policies, the policyholder chooses a maximum amount of overall coverage that will serve as the limit and represents the highest amount of money the insurer will reimburse the policyholder if they make a claim. This amount will depend on the total cost of the event, and the policyholder may have to pay a deductible before the policy’s coverage kicks in.
Event cancellation insurance is typically an all-cause coverage that protects against severe weather conditions, threats or acts of terrorism, labor strikes, wildfires, earthquakes, and venue unavailability due to issues such as power outages, floods and fires. It may also include enforced reduced attendance, which would apply if there is a significant reduction in attendance because of any of the aforementioned unexpected circumstances.
Special Events Covered By Cancellation Insurance
There is a broad range of expenses related to special events that this type of insurance may cover. Here is a look at some of the most common components that this insurance addresses.
Catering, Flowers And Entertainment
This insurance may offer reimbursement for non-refundable down payments on catering, florists and entertainment providers related to the event.
If, for example, a wedding dress is damaged while it is being professionally ironed, this type of insurance may pay for repair or replacement.
Event cancellation insurance could provide coverage for payments that are made to a professional photographer if that individual fails to show up for the job or the images are damaged or lost before they can be delivered.
This policy may provide reimbursement for lost fees should an event need to be cancelled because of the military deployment of a person participating in the event or an officiant.
If event-related jewelryis lost or damaged during the event, this type of insurance could provide protection, and it may extend for a certain amount of time after the event as well. Some of the common types of jewelry that this type of insurance may apply to include wedding rings and quinceañera crowns.
If a major gift that is intended for the event becomes damaged or lost, this type of coverage could pay for its repair or replacement. It may also cover monetary gifts up to a specific dollar amount.
Should the cancellation or postponement of a special event cause an active event participant so much distress that a medical doctor recommends they undergo counseling, this type of coverage could pay for those services.
Who Can Obtain Event Cancellation Insurance?
Most event cancellation insurance policies only cover private events for U.S. residents, so it is important to discuss the requirements with an insurance broker. Sporting events, business events and other types of public events may not qualify for cancellation insurance, but there may be other types of policies that can be obtained for these types of events. Moreover, it is important to be mindful of any guest limits as coverage may be unavailable for guest lists that exceed a certain number.
Destination events are a gray area. Some policies will cover events that take place overseas if the policyholder is an American citizen and the event is held in certain locations outside the U.S. However, it is important to clarify this with an insurance agent or broker beforehand.
It is also important to keep in mind that event cancellation insurance will typically not provide coverage if a bride or groom chooses to voluntarily call off a wedding.
When Can You Obtain Event Cancellation Insurance?
It is a good idea to start looking into this type of insurance as soon as you start to fill out event contracts. Some insurers will not allow these policies to be taken out more than 24 months prior to the event or in the 15 days leading up to the event. Keep in mind that premiums for this type of policy may be due up front.
Reach Out To The Insurance Professionals
If you are planning a special event, give yourself the peace of mind that comes from knowing that an unexpected cancellation will not be financially devastating. Get in touch with our experienced insurance brokers at MFE Insurance Brokerage to find out how their custom insurance products for events can give you the protection that you need.