COVERAGE CORNER

OCTOBER IS FOR LOVERS (AND RELATED INSURANCE CONCERNS)

By Kevin C. Amrhein, CIC, CBIA

It's 2021, so yet another story of how supply and labor shortages are screwing things up shouldn’t surprise me.

But I read one recently that did. It’s regarding (pause for dramatic effect) wedding officiants.

It makes sense. The lifting of gathering restrictions coupled with almost no events held last year caused a surge in demand. The number of couples planning wedding events over the next several months is so extreme that there simply aren’t enough qualified people available to formally “seal the deal.”

According to Wedding Wire, the most popular month in the United States for weddings is October – the same month in which this issue of Primary Agent is hitting mailboxes. Thus, the timing seems right to review a few coverage issues regarding your insured’s forthcoming nuptials.

WHO IS AN “INSURED” – HOMEOWNERS

Over 80% of couples reside together before tying the knot. There is never a bad time to remind personal lines insureds that “insured” status is not automatically granted to unmarried persons simply due to residency. If only one of the lovebirds is named on the dec page of the HO policy, the other is not an “insured” unless specifically added.

AN ISSUE WITH AUTO

To piggyback on the livingtogether-before-married issue, there’s a concern in the ISO Personal Auto Policy worth noting if both individuals own cars which are insured under separate policies. For example, say Kevin lives with his soon-to-be-spouse Elizabeth. In the driveway are Kevin’s Ford and her Honda. Kevin’s auto policy includes only the state-minimum liability while Elizabeth carries much higher limits on her policy. If Elizabeth is driving Kevin’s Ford and is responsible for an accident, she would have access only to Kevin’s low limits due to an exclusion in her policy for using a non-owned vehicle considered available for her regular use. Some carriers may be amenable to removing this exclusion via an endorsement.

VENUE CONTRACT

Not surprisingly, another sideeffect of the recent wedding surge is venue availability. Some popular venues report being so overbooked that they’re telling couples the event must occur mid-week during business hours. Fun!

If your insured is one of the lucky ones who secured that dream venue, he/she likely will be required to agree to certain conditions such as the defense and indemnity of the venue should someone claim bodily injury or property damage during the event. Should the venue receive notice of a claim (and we all know how slippery that dance floor can get), the likelihood is high that such notice will be delivered promptly to your insured.

Provided the nature of the claim is not excluded elsewhere in the policy, the assumption of liability by contract is covered in Section II of the ISO HO policy due to an exception in exclusion F.1.(b):

Coverage E (Personal Liability) does not apply to:

1. Liability…

b. Under any contract or agreement entered into by an “insured”. However, this exclusion does not apply to written contracts:

(1) That directly relate to the ownership, maintenance or use of an “insured location”; or

(2) Where the liability of others is assumed by you prior to an “occurrence”; unless excluded in a. above or elsewhere in this policy;

VERIFY VENDOR INSURANCE

“You’re my favorite band/caterer/ florist, and I’m so happy you’re available for our wedding! Now, about that proof of insurance….”

Does this sound like something any non-insurance person would ever say? Most people don’t think about insurance, especially as it relates to such a joyful occasion. Reminding insureds of the importance of utilizing the services of insured vendors may not score you an invite to the event. But it’s essential advice, and if the vendor is uninsured, the injured party and/or venue contract likely will try to pin claim costs associating from the vendor’s actions on your insured. Further, should an uninsured vendor claim its property was damaged or that one of its employees suffered bodily injury during the event, your insured may be held responsible.

TAKEAWAYS FOR THE AGENT

▲ Based on recent data, it’s highly unlikely that weddings are not being planned among your book of personal lines insureds.

▲ If possible, review policies of both individuals to discuss the importance of “insured” status and make necessary adjustments.

▲ Warn insureds of the importance of reviewing venue contracts and obtaining protective assurances from vendors.

▲ Weddings are joyful occasions but not without risk. The guidance you can offer before the event could save the happy couple from spending years of their marriage mired in an avoidable financial burden.

That’s all for now. Until the next round … cheers!

Kevin C Amrhein, CIC, is IA&B's education consultant. He works with our CISR and CIC programs, as well as our special topic seminars and live webinars. Catch him at one of our upcoming professional training offerings: IABforME.com