Jack and Sarah had planned a wedding abroad, but the venue cancelled their booking because Covid-19 meant it couldn’t source the staff or supplies it needed. The insurer argued that their claim was excluded because government restrictions were in place. We decided this exclusion didn’t apply in the circumstances of this case, and told the insurer to pay the claim.

What happened

Jack and Sarah contacted us after their wedding insurance claim was declined.

They told us their wedding venue, which was abroad, had cancelled their booking, saying the Covid-19 pandemic meant it couldn’t source the staff and goods it needed for the event. But when they claimed on their insurance, the insurer had told them that the policy only covered certain eventualities, and the fact that the venue was having difficulties sourcing what it needed wasn’t one of those.

The insurer had also said that the policy’s cover for cancellation due to an outbreak of disease would have been valid – but there was an exclusion in the policy for cancellations relating to government actions.

Jack and Sarah weren’t happy that their claim had been declined, or with how the insurer had treated them at a very stressful time. So they asked us to resolve their complaint.

What we said

We asked the insurer for the policy wording. We noted that the policy would cover the claims where the wedding was cancelled due to an “infectious or contagious disease”. The policy didn’t define this – but we were satisfied that Covid-19 fitted that description.

The insurer argued that there wasn’t an outbreak “at the premises”. But the policy said that there would be cover for expenses 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, damage to the venue, murder or suicide at the premises or closure of the venue by the relevant authority”

However, although the policy term included the words “at the premises” it wasn't clear that this was intended to apply to the whole clause – rather than just the part about murder or suicide.

The insurer also said the exclusion for government act or regulations meant the claim wasn’t  covered if the venue closed due to government restrictions. But we felt any powers to close a venue would be highly likely to be derived, either directly or indirectly, from government regulation or acts. It was difficult to see a situation in which a venue would be closed by a “relevant authority” that wasn’t using powers derived from a government act or regulation. The policy wording wasn’t clear about what the insurer meant.

But the insuring clause and exclusion clause had to be read together. If either clause was looked at in isolation, the consumer would or would not have cover, depending on which clause was considered. It wouldn’t be fair to say that the cover given by the insuring clause was taken away by the exclusion. In any case, the government restrictions in the country where Jack and Sarah’s wedding was due to take place had been lifted by the date of the wedding.

It was true that the policy didn’t list cancellation due to venues being unable to source staff or supplies as something it covered. However, the venue couldn’t get the staff or supplies it needed due to an outbreak of Covid-19 – an infectious or contagious disease. In these circumstances – where the effective cause of the cancellation was Covid-19 – the claim should have been covered, and the exclusion for government acts didn’t apply.

We appreciated how upsetting the situation had been for Jack and Sarah – with the insurer’s actions making this worse.  We told the insurer to consider their claim in line with the policy terms, adding 8% simple interest from the date of the claim to when it was settled. We also told the insurer to pay compensation for the additional upset it had caused.