What does wedding insurance cover?

If you're planning your wedding, you've put in a tremendous amount of time and money to ensure it goes smoothly.  No matter how carefully you've prepared, though, your big day could easily get derailed by bad weather, a vendor going bankrupt or even a natural disaster.

That's where wedding insurance comes in. Also known as special event insurance, it can protect a couple financially from postponement, cancellation, damages, theft and more.

Wedding insurance is a special event insurance policy that covers unexpected circumstances during your ceremony, reception and beyond. 

"You have a lot of concurrent vendors coming together for an event," Todd Shasha, assistant vice president of personal insurance at Travelers, told CNBC Select. "You have a venue for a wedding that you're putting down a deposit on, potentially multiple thousands of dollars. If that venue goes out of business or if there's a disruption due to a storm, there are certainly exposures for those funds." 

The venue is just one of many wedding expenses, Shasha added. There's a photographer or videographer, a band, a dressmaker, a florist, a wedding planner.

"All of those vendors that are associated with the event potentially present a risk," he added. "Let's say they don't show up or go out of business. You can hedge your investment with wedding insurance." 

There are two different types of wedding insurance policies

Cancellation or postponement

A cancellation policy covers non-refundable payments if you have to cancel or reschedule due to outside circumstances, like severe weather, illness or injury. It may also include vendor no-shows and specialty items at risk of damage or theft.

Liability insurance

Most venues will require you to purchase a liability policy that covers damages or injuries you're found responsible for. Many insurers offer a liquor liability add-on that covers losses related to alcohol served at the event. Depending on your plan, your liability coverage may extend to the rehearsal dinner and next-day brunch.

Wedding insurance doesn't cover every circumstance, however. Most policies won't pay out if you get cold feet, for example.

Wedding insurance doesn't cover all circumstances, however. Most policies won't reimburse you if you cancel because you no longer want to get married. 

Wedding liability insurance generally costs between $100 and $175, according to Elisabeth Kramer, a wedding coordinator and consultant based in Portland, Oregon. "In the scheme of wedding planning, where the average wedding costs $30,000, this is kind of a drop in the ocean, for better or worse," she says. 

The price varies by the amount of coverage needed and the size of the wedding. Many of Kramer's clients opt for $1 million of liability coverage. 

Other add-ons are available, as well, including liquor liability insurance to protect you from expensive alcohol-related injuries or damage. 

Cancellation policies are optional, but Kramer says more venues are requiring liability insurance.

"Somewhere in the neighborhood of 75%, maybe 85%, of my clients take out liability insurance," she said. "That's not because they're just covering their bases. It's because they're contractually obligated by the venue or venues that are hosting their wedding." 

If you're hosting your wedding at home, review your homeowner's insurance policy to see whether it covers some or most of your needs.

Couples can buy wedding insurance either on their own or through an insurance company they already work with.

"If they carry auto or home insurance, they can contact their agent and specifically ask for it," Kramer said. "Sometimes there can be a cost savings." 

As with any coverage, shop around for the highest coverage limits within your budget and read the fine print for any policy you're considering. 

"You're contracting with between 10 to 15 different businesses," Kramer said. "I would just read the policy and be clear on what type of money I am getting back." 

Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date