When we think about travel, we might be imagining pristine beaches, cocktails by the pool, a chance to explore a new culture. But for travel agents and tour operators, there is a long list of risks to consider – and some of those risks could result in claims, lawsuits, financial loss for your business and more.

That’s why having a robust public liability insurance policy is important – to help protect you and your business from as many contingencies as possible. That said, many travel operators aren’t aware of what could happen, or the kind of insurance they actually need, says Gow-Gates Account Executive Alana.

“We see a lot of our travel clients define themselves in a certain way, and it doesn’t always align with what the insurers define them as,” she explains. “We also see a lot of clients thinking they don’t need public liability, or that their general office policy will cover them for tours overseas. Hot tip: it doesn’t!”

Public liability insurance: travel agents versus tour operators

If you operate in the travel industry, it’s important to understand the nuances of insurance and how it might relate to what your business does, says Alana. “For example, if you’re a travel agent and you are booking accommodation and flights or planning itineraries, you may only require an office risk public liability policy which is different insurance to, say, a tour operator who’s exposed to greater public liability.”

For travel agents, public liability insurance is mainly related to office risk. “For example, if someone comes in to discuss a holiday booking and they trip and fall in your premises and injure themselves, they might file a claim against you. Similarly, if you exhibit at an expo or trade show – and a third party suffers an injury or property damage, a public liability policy will provide you with cover for that, too.”

If you’re a tour operator and are branding tours under your business name, you should consider taking out a more comprehensive tour operator liability policy. “It’ll cover you for your tour activities as well as your office-based risk,” says Alana.

How much coverage you need (and what you can’t get cover for)

There are typically two levels of cover for public liability – $10 million or $20 million.

“What you opt for depends on the risk you want to take on as a business. So, if you’re operating a really big tour overseas, you might want to opt for the higher limit, or if you’re running higher risk activities that could result in lifelong injuries for your travellers then you might consider a higher cover,” explains Alana.

Always consider the activities you’re offering and the level of service you provide whilst on tour – extreme sports or high-risk activities may mean you struggle to get coverage or pay hefty premiums, as opposed to operators who might be selling a walking tour or a cultural food tour.

“Insurers are less inclined to provide cover if your tour involves activities such as skydiving, helicopter rides, hot air ballooning, bungee jumping, mountaineering, rock-climbing – or even things like trekking above a certain altitude,” she adds. “Cycling is considered a high-risk activity, but we do have markets for that, and it may be considered by an insurer.”

As a tour operator with an itinerary of high-risk activities, you may like to consider the following:

a) Mitigate the risk by opting out of certain exposures and ensuring you have a robust waiver and/or T&Cs written by a qualified lawyer. Also, ensure all clients on the tour have their own travel insurance (a requirement anyway if you’re taking out tour operator’s liability insurance)

b) Transfer the risk – Run high-risk activities through a third party who has their own insurance. Again, ensure you have a robust waiver and/or T&Cs written by a qualified lawyer so you don't take on these liabilities.

c) Avoid the risk – Don’t provide tours which include high risk activities.

Worst-case scenarios for tour operators

A tour guest slipping on a wet hotel floor, or the tour bus crashing may be covered by the insurances that those service providers have in place. However, a traveller may still raise a claim against you if they feel you were responsible for the injury. Worst of all, if you have a fatality on tour or a traveller suffers a life changing injury – these are all public liability risks that can have wide-ranging insurance implications you may not have considered.

For example, Alana remembers a case years ago when a tour guest died on a tour. The operator was not held responsible for the death of the traveller, but the family made a claim for mental anguish against the tour operator.

“The tour operator was found to be liable for the mental injury that the family suffered,” says Alana, “and the insurer had to pay out hundreds of thousands of dollars to the family. That’s a rare case, however it shows that even if we have a very high level of risk mitigation and also good procedures in place a claim can still be successful.”

Final tips for businesses in the travel space

Always reach out to your broker about all your concerns when looking into insurance or negotiating a new policy, whether you’re a travel agent or tour operator.

“If you’re a tour operator, you want to ensure you can get coverage for the activities you’re planning or the location you want to go to,” says Alana , “and you always want to advise your broker or insurer if there have been any changes within your business throughout the year. Because if a claim does arise and the insurer believes it wasn’t part of your original policy, they could decline cover.”

Ultimately, having the right insurance in place at all times gives you peace of mind and helps protect your business, so it’s important to get advice and stay on top of it.

Work in travel and want to know more about public liability insurance? Connect with our Gow-Gates Insurance Brokers Travel Team for a chat about your needs.