CYA 101 – 5 Ways to Best Protect Your Agency: Travel insurance and E&O
June 4th, 2009 . by Richard EarlsNo travel agent should ever allow any client to travel without having first advised the client of the availability and advisability of travel insurance. Clients, looking to save a few dollars, may opt not to purchase coverage, but the smart travel counselor will always recommend insurance. Travel agent forums like TRO’s Community are filled with stories of clients traveling to distant lands and then falling ill, becoming injured or otherwise experiencing some hardship that a good insurance policy might have covered.
Travel insurance policies are not always easy to understand. There are websites where agents can compare features and prices such as insuremytrip.com and squaremouth.com. But the best sources of information are the representatives of the various suppliers that provide travel insurance to the industry. Travel insurance companies almost uniformly provide excellent and attentive customer service to travel agents and have facilities for answering common questions. Each travel agency would do well to spend considerable time choosing a company and then developing a solid relationship to promote customer service communications.
It is widely acknowledged that third party insurance is far preferable to the insurance sold by the tour operator or cruise line. Even when the tour operator insurance is provided by a well-known company, the exclusions are typically broader and the coverage more narrow than when purchased directly from the insurance carrier.
When clients decline to purchase travel insurance, good agents will back up and make the recommendation a second time. Clients that still decline should be asked to sign a waiver indicating that insurance is advisable and available, but declined. The agency’s disclaimers on marketing and travel itinerary collateral should also indicate the advisability and availability of travel insurance. There may be no more important protection for an agency against claims of malpractice than a solid travel insurance program and operating procedure.
Errors and Omissions insurance, also known as professional liability insurance, is also an important consideration and a must-have for the travel agency. Although these policies are more narrow than many agents believe (they won’t cover a debit memo or a mis-quote for example) they can in many instances cover a failure to adequately or correctly describe travel logistics, entry requirements or other mistakes or omissions regarding travel. As important as covering the client’s loss, E&O also covers legal fees, often the most expensive part of any dispute.
Nobody wants to talk about insurance. Equally true, however, is nobody wants to be without insurance when it is needed. School yourself immediately on the topic and protect your agency’s future.
Tomorrow: Tour Operator Failure
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