Travel agents are tourism professionals who help travelers plan domestic and international vacations and trips. If you own your own travel agency or you operate as an independent contractor, it can be a good idea to protect yourself against lawsuits with business insurance. But which types of insurance do you need as a travel agent?
Today we’ll explore the types of insurance you may need as a travel agent, where you can find reliable insurance providers and how business insurance works when you operate as a travel agent.
Best Travel Agent Insurance
There are many companies that offer comprehensive business insurance for travel agents. You can begin your search by collecting a few quotes from our favorite insurers below.
Types of Travel Agent Insurance
There are multiple types of business insurance that a travel agent may want to consider to protect his or her business. Let’s take a look at a few of the most common types of business insurance for travel agents you might purchase to protect your travel agency against lawsuits.
Errors and Omissions Insurance
Errors and omissions insurance (sometimes referred to as professional liability insurance) protects you against malpractice lawsuits from clients alleging that you conducted your business in a negligent or fraudulent manner. For example, let’s say that you created an airline booking for a client which is then later cancelled by the airline without your knowledge. If that client sues you for negligence, your errors and omissions insurance would help pay for the cost of legal defense for you and your business.
Other instances that may result in the need for errors and omissions insurance can include:
- Mistakes in client travel itineraries
- A customer believes that you advertised a vastly different experience than they were provided with
- A customer believes that they were provided with unsafe or unsanitary accommodations
- You fail to inform a customer about necessary visas, vaccinations or travel documents needed upon arrival
- An airline cancels a customer’s flight and you are not able to reschedule one for them in time
Vacations can quickly become expensive for your clients, which increases their expectations. Errors and omissions insurance should be considered an absolute must-have for any travel agent who provides itineraries and bookings for clients.
General Liability Insurance
General liability insurance protects you financially against a wide variety of common injuries and lawsuits. General liability insurance includes a wide umbrella of protections — most policy providers include at least the following protections:
- 3rd-party bodily injury. If a client is injured on the premise of your travel agency, there is always a possibility that you may be sued for resulting medical bills. 3rd-party bodily injury insurance would help to cover the cost of legal fees you incur as a result or any court-awarded medical bills.
- 3rd-party property damage. If you or 1 of your employees damages a client’s property and are sued for a repair or replacement, your 3rd-party property damage insurance would help cover the costs of legal action and any court-ordered judgements.
- Advertising injuries. In the course of advertising your business, it’s possible to unintentionally defame a competitor or copy a competitor’s slogan. Advertising injury protection will help you defend against any libel, slander or copyright infringement lawsuits brought against you by other businesses.
General liability insurance for your business is similar to liability insurance for your vehicle. If you’re involved in a car accident, your liability insurance will pay for damage to the other person’s vehicle. However, it will not provide you with any form of compensation for damage to your own vehicle.
In the same way, general liability insurance will help you fight against lawsuits and compensate your clients for any court-ordered judgements, but it will not compensate you for damage done to your property by clients or your employees, nor will it help you pursue a lawsuit against a competitor.
Commercial Property Insurance
Commercial property insurance protects you against physical damage done to your own business property. Commercial property insurance covers your physical property, including your real estate, the office space where your business operates from, the equipment that you use to create client bookings and more.
If your property is damaged, destroyed or stolen, your commercial property insurance will help you pay for a repair or replacement. As a general rule, any business owner who works from a commercial space should have commercial property insurance.
Depending on your location, you may want to customize your commercial property insurance to include hazards not typically covered under your general policy. For example, you may want to pay a little more to include coverage for damages resulting from a flood if your business is located in a high-risk flood zone. Most commercial property insurance policies exclude damage resulting from natural disasters, forced closures and general wear and tear.
Business Owner’s Policy (BOP)
A BOP is a comprehensive business insurance policy that bundles together your general liability insurance with your commercial property insurance. A BOP is typically less expensive than purchasing both types of insurance separately. You may be able to customize your BOP to include extended protections necessary based on the location and nature of your business as well.
Cost of Travel Agent Insurance
The specific price that you’ll pay for your travel agent insurance will depend on a variety of factors. Some things that might influence what you’ll pay can include:
- Location. If your agency is located in an area that’s statistically more likely to be affected by fires, theft or other hazards, you’ll pay more for your commercial property insurance.
- Experience. Agencies with more experience tend to pay less for their insurance coverage. This is because experienced agents are less likely to miscommunicate with clients or create a negligent booking.
- Previous claims. If your agency has previously filed a claim with an insurance company, you’ll typically pay more for your coverage.
- Number of employees and payroll. The larger your travel agency is, the greater a risk you present to insurance companies. A small travel agency will typically pay less for insurance than a large travel agency with the same number of years of experience in the field.
The average price for a general liability insurance policy for a small travel agency is between $27 and $39 per month, while the average commercial property insurance costs about $63 a month. You may be able to save on both types of protections by combining them into a single BOP.
How Travel Agent Insurance Works
Business insurance for travel agents aren't a single set type of protection. It’s a combination of insurance types that protect you against the unique risks of your industry. For example, both a tutor and a travel agent may have errors and omissions insurance, but each person would use their insurance under very different circumstances.
You are typically not required to have travel agent insurance if you are a sole proprietor or independent contractor. If you have 1 or more employees, you may be required to purchase workers’ compensation insurance to protect your employees against injuries sustained at work.
Though not usually required by law, we highly recommend that travel agents carry at least general liability insurance and errors and omissions insurance, as well as commercial property insurance if they operate from a physical location outside of the home. You can often save money by combining your protections together with a single BOP from 1 company that offers all the types of insurance that you need.
Protect Your Agency
As a travel agent, you know that sometimes a vacation can turn into a misadventure — especially when traveling outside of the country. Protecting yourself and your livelihood doesn’t need to be complicated or expensive. Start by collecting a few quotes from competing business insurance providers and considering what types of coverages your business needs.