How wedding insurance will adapt to a post-pandemic world

Wedding revenues dropped by almost 40% drop in Ontario last year, according to HelloSafe.ca, due largely to the COVID-19 pandemic. Wedding insurance, as a result, was also affected.

Pre-pandemic, Front Row Insurance Brokers was receiving about 200 orders a month for third-party general liability, said Mike Groner, the brokerage’s vice president. “That was what forced most people to buy wedding insurance: to satisfy a requirement to get into a venue,” he said, adding that many venues now require hosts to have this coverage.

“I’d say only one in 10, or maybe one in 15, purchased the first-party event cancellation coverage,” Groner said, which would cover something happening to the venue itself or a weather-related incident.

However, Front Row doesn’t offer first-party event cancellation for the moment.

“After March 2020, when the stay-at-home orders were enacted, we actually had to pull event cancellation coverage from the program altogether,” Groner said. “In our case, we did not have a communicable disease exclusion pre-pandemic, so several weddings did get cancelled, but we did cover claims to cover expenses when the initial stay-at-home orders were enacted.”

Front Row is still working with its insurance company for “proper exclusions for communicable disease,” Groner said.

PAL Insurance Brokers’ Weddinguard didn’t have this issue. “The [first-party liability] policy does not cover any communicable diseases, such as COVID-19, so that is an exclusion that’s built into Weddinguard,” said Matt Taylor, general manager with PAL.

“Over COVID, we have tried to work with the brokers and clients by saving premiums and postponing wedding dates at no additional cost — if it’s out of the insured’s control — and have been waiving fees for endorsing a future date for their weddings,” Taylor said.

Post-pandemic, Taylor and Groner agree that people will continue to purchase first-party liability insurance. Taylor sees the pandemic as a lesson for those planning their nuptials. “It has really opened up the eyes of those getting married that unforeseen circumstances may happen — outside of COVID — that could trigger the policy coverage,” he said.

A price increase may be inevitable, however. “I think the cost is going to be much higher,” Groner said. “There’s only a finite number of insurance companies that dabble in these types of exposures and because they were all hit with such huge losses at the start of the pandemic, for them to come back in — even if they’re not offering coverage for a future pandemic or any communicable disease — they still have to come up with a way to build back.”

As for how prices could change, “where we would sell event cancellation coverage for a wedding for maybe $100, my fear is that when we do relaunch, it will be probably double that with the same limits,” Groner said.

Right now, however, Front Row is happy to see almost 50% of wedding orders have returned compared to pre-pandemic. “People are hosting events again; people are planning their weddings,” Groner said.

As for adding in future pandemic wording into policies? Taylor doesn’t see it happening.

“Unfortunately, the communicable disease exclusion has always been excluded by our insurers, and I can’t foresee any additions just because it’s such a huge catastrophe and a big exposure, especially at the current moment,” he said. “It would devastate the current insurance market if COVID-19 coverage was available.”

 

Feature image by iStock.com/freemixer