Professional indemnity insurance, is by far the most important form of cover for travel agents. Your customers come to you because they want their trip to be as straightforward as possible. They do not want to spend hour finding the best flight, and the best rooms, at the best price. They want you to do this for them. But this puts a lot of pressure on you to get it right every time.
In this post we will discuss what professional indemnity insurance is, what it covers, and why you need it.
For more information about your insurance obligations as a travel agent or tour operator, be sure to check our dedicated travel insurance hub.
What is Professional Indemnity Insurance?
Your customers trust you to deliver certain standards of service. If you make any errors or omissions, at best your customers could be inconvenienced, or left out of pocket. Yet at worst, your oversight could place your customers in danger.
As a result of your mistakes customers may make a formal complaint, or they may even decide to take legal action against you. Professional Indemnity insurance can provide cover for any compensation your customers may be due, along with cover for any legal fees you may incur following a lawsuit.
Why Do Travel Agents Need Professional Indemnity Insurance?
Any business in any industry that provides paid services to clients needs some form of professional indemnity insurance cover. Travel agents and tour operators are no exception.
We all make mistakes from time to time. And as a travel agent, the slightest oversight on your part could have unfortunate consequences for your customers.
Plus, travel is unpredictable. Many things that could go wrong for your customers over the course of their trip might be out of your hands. The airlines you book could cancel flights. The hotels you book could be less luxurious or convenient than you were led to believe. A country could even change its entry requirements after you have arranged a trip.
Any of these instances could make life difficult for your customers, who could then take action against you. Professional indemnity insurance can help minimise the risk and liability, providing essential peace of mind for both you, and your customers.
What Does Professional Indemnity Insurance Cover?
- Professional Negligence: As a travel agent you are responsible for various critical tasks such as booking flights, including connecting flights, and sourcing and securing accommodation. Professional indemnity insurance safeguards against potential claims made against you of professional negligence, errors, or omissions that could result in financial losses for your clients.
- Client Compensation: If you are found liable for a client’s financial loss, professional indemnity insurance provides the necessary financial protection.
- Legal Costs: If a client claims that your advice or service caused them financial harm, legal defence expenses can quickly add up. Professional indemnity insurance covers these costs, including legal fees and court expenses.
- Protecting Your Professional Reputation: Professional Indemnity insurance allows you to promptly manage and mitigate the effects of potential claims, limiting the potential impact on your reputation.
What Does Professional Indemnity Insurance NOT Cover?
As with any insurance policy, most Professional Indemnity insurance policies include certain exceptions. These might include:
- Liability. Professional Indemnity insurance does not provide cover for injury or property damage customers may experience. This will be covered by a separate liability policy.
- Moral hazard. This is where parties mentioned in the policy, whether it is the travel agent or the customer, take unnecessary risks in the belief that their insurance will cover them should anything go wrong.
- Wrongdoing: Professional indemnity insurance does not cover claims arising from intentional wrongdoing, fraud, or criminal acts committed by the travel agent or travel operator.
- War and Terrorism: Losses resulting from acts of war or terrorism are typically excluded from professional indemnity policies.
Specialist Insurance For Travel Agents and Tour Operators From James Hallam
At James Hallam, we have provided specialist insurance for tour operators and travel agents for over 20 years. We have a thorough understanding of the unique risks businesses face in the fast-moving travel industry.
We will take the time to understand your business so we can tailor the best possible travel and tour insurance programme for you and your customers. We can also advise on other insurance policies you may need to get truly comprehensive cover at the best price.
Find out more about our specialist travel industry insurance services.