We all make mistakes. Errors and Omissions insurance is a MUST for Travel Professionals, but why?
Written By: Chris Buseman, Account Executive – Specialty Insurance Programs – 360 Coverage Pros
If there’s one thing the COVID-19 pandemic has taught the travel industry, it’s the need for errors and omissions (E&O) insurance coverage. Mistakes made by a travel agent or tour operator, whether real or perceived, can have disastrous legal consequences. Imagine that, after booking a trip for someone, changing entry and vaccination requirements necessitate a last-minute cancellation — or even worse, a demand from officials at the destination that the travelers turn back. There are countless possible scenarios during travel and vacation stays that can annoy or anger your clients, leaving your business open to litigation.
There’s no such thing as a perfect trip — except perhaps in the mind of the traveler — and if you’re fortunate, the trips you plan will only experience minor glitches, ones that you can smooth over quickly. But the reality is that some trips will fail catastrophically. It’s inevitable. How can E&O insurance protect you from lawsuits that can put your career and business in jeopardy?
What Is E&O Insurance Coverage and What Does It Cover?
E&O insurance helps protect travel agencies from being sued by unhappy clients. While it benefits organizations in many industries, this article will discuss it from the perspective of the travel industry. In this context, E&O insurance may also be referred to as travel agent insurance, travel agency insurance, or tour operator insurance. While policies vary in the details, some of the litigation that is often covered by an E&O policy includes:
- Legal defense fees resulting from a lawsuit by a client (until the agency is proven guilty)
- Remuneration for claims of negligence or human error on the part of the agency
- Property loss or personal injury that is established to be the fault of the travel agency
- Trip cancellations and rebookings caused by external factors (subject to individual policy details)
E&O insurance is one of the layers of protection you can enable to prevent expensive litigation from affecting your bottom line — or even resulting in the closure of your agency.
What Will E&O Insurance Not Cover?
E&O insurance will not cover every scenario, and each insurance company’s policy will vary in the actual details. But there are a few things that most policies will not cover, including:
- Moral hazards (risky situations where a party throws caution to the wind because they are covered)
- Debit memos from airlines
- Errors in disclosure of travel insurance rates and coverage or other price misquotations
- Copyright abuse claims
Why Do Travel Industry Professionals Need E&O Insurance?
There are numerous reasons why travel industry professionals need E&O insurance. Insuring your business is, first and foremost, a best practice, promoting customer loyalty and protecting your bottom line. But there are additional advantages that show the importance of travel E&O insurance:
It minimizes risk and liability. Mistakes happen, and there are many factors in travel that are out of the control of even the most connected and experienced agent. Airlines cancel flights, delayed flights cause missed connections, hotels and resorts sometimes falsify advertising, countries change entry requirements, natural disasters occur, regions become politically or socially destabilized — the list goes on and on. While E&O insurance may not cover every single eventuality, it definitely minimizes the risk of accusations and litigation against your business.
It improves customer confidence and satisfaction. While there are always people who make frivolous claims, many travelers just want peace of mind and satisfaction. Knowing that your agency is covered can provide that confidence. And when you deal with legitimate claims with that knowledge, your clients will more likely be satisfied with the resolution and feel more inclined to return to your agency, even if one trip went awry.
It gives you peace of mind. Knowing that your insurance will pay for legal defense in the face of frivolous claims will greatly reduce your stress levels. You will be able to concentrate on satisfying loyal customers instead of being consumed with complaints and accusations. Peace of mind can also be contagious for your employees and clients alike.
E&O Insurance Makes Sense
In addition to the benefits discussed so far, E&O insurance is often an affordable protection for your business. While serious mishaps can cost you time, money, and the loss of clientele, 360° Coverage Pros offer E&O insurance rates that start as low as $25.67 per month, making it a cost-effective way to protect your investment. Schedule a free consultation today to see how easy it is to get the protection your travel business needs.