Find out why Travel Professionals need E&O Insurance

 

Written By: Chris Buseman, Account Executive – Specialty Insurance Programs – 360 Coverage Pros

 

Purchasing errors and omissions (E&O) coverage has become a best practice for travel industry professionals globally. Also referred to as travel agent insurance, travel agency insurance, or tour operator insurance, or professional liability insurance, it can protect your business from:

 

• Penalties against accusations of human error or negligence by your agency
• Legal defense for lawsuits initiated by a client or third party
• Damages to property or personal injury if your travel agency is at fault or if allegations are made resulting from bodily injury or property damage

 

While E&O insurance doesn’t always provide blanket coverage, examining some hypothetical situations where it could protect your business can help you see why there’s a need for travel industry professionals to have E&O coverage. These situations are based on real events reported on in the news.

 

Case 1: Trip Cancellation

In this hypothetical situation, a family books a trip to a popular family vacation destination that costs thousands of dollars in transportation and hotel bookings, as well as planned activities. On the day of travel, they arrive at the airport or bus terminal only to find out that the trip was canceled by the airline or tour company. In order not to lose out on the vacation, they pay for alternate travel arrangements by using a credit card or dipping into their savings. Unhappy, they initiate a lawsuit against your agency to recoup their additional expenses. The claim is that the cancellation was the fault of the travel agent’s negligence.

 

 

This is similar to what actually happened to numerous families in Philadelphia who purchased trips to Disney World from the same agency. The question is whether E&O insurance protects the agency in a claim like this. Numerous factors may come into play, and protection may be limited by policy details, but in general E&O coverage would pay for the legal defense of the agency, at least until any true damages are established. Regardless of fault or negligence, the agency’s legal fees, defense costs, and in some cases missed wages and travel are covered, allowing the agent to focus on their business rather than ongoing litigation.

 

Case 2: Personal Injury and Safety

Some countries experience a high number of suspicious occurrences in popular tourist destinations, leading to health injuries, sexual assault, robbery, and other crimes. Imagine that young women traveling together meet in the resort bar for drinks. After just a couple of drinks, they begin to black out. Not feeling well, they go back to their rooms, where one of them blacks out alone. The following morning she discovers that she has been assaulted but has no memory of the crime

 

 

A recent report by the Milwaukee Journal Sentinel investigated more than 170 claims of this type and similar made by travelers to Mexico. In some cases, tourists actually lost their lives, but inaccurate or negligent reporting by Mexican authorities and foreign consulates exposed the travel agents who sold the trips to legal claims. Because of the nature of the crimes, such lawsuits can involve exorbitant settlement fees and legal costs. E&O coverage would at least cover your legal fees and hire legal representation so you can concentrate on day-to-day operations. In these cases, common allegations made against travel professionals may stem from a “failure to advise” the client of potential dangers or a “failure to disclose” a past incident at the same or similar resorts. This would contribute to your peace of mind and allow you to keep your business running responsibly.

 

Case 3: Health and Entry Requirements

Another common scenario is changing entry requirements or disease outbreaks. For example, imagine a couple that books a cruise leaving from a country that does not require them to have an immigration visa. Flight delays cause them to miss connections, and the ship leaves port without them. The only way to salvage the trip is to meet the cruise ship at its next port, but it’s in a country that requires a visa. The couple blames the travel agency for the delay, waiting time, and additional expenses of getting a visa.

 

Imagine another couple that books an African safari. Right before they leave, there is a disease outbreak that requires specialized vaccinations or a period of quarantine at the traveler’s expense — or worse yet, the country cancels entry completely until the outbreak is contained. This couple loses their airline and hotel bookings and the deposit on their safari. They blame the travel agency or tour operator for their losses.

 

 

Again, these cases are based on real-life situations that have occurred. E&O coverage can protect the travel agency and tour operator from allegations of negligence, protecting their bottom line and helping ensure that their business can continue to operate.

 

E&O Insurance Offers Cost-Effective Protection

The legal implications and loss of resources in time and money in any of these cases could be devastating if the company has no E&O coverage. On the other hand, coverage from an E&O insurance provider such as 360° Coverage Pros starts as low as $25.67 per month. This is a relatively small price to pay for peace of mind and protection against allegations or frivolous claims. Schedule a free consultation online to get started in finding the E&O policy that fits your travel agency’s needs.