Rather than arranging an insurance policy designed to protect your customer’s funds from the consequences of the financial failure of your business, the new product that Gow-Gates have developed is designed to protect your Client funds that you have isolated in a special Client Trust Account.
The use of a Client Trust Account to isolate client funds will provide a significantly better level of consumer protection than if you simply use one bank account, containing both your operating funds, and your clients’ funds.
If you do not currently operate a Client Trust Account, Macquarie Bank Limited have tailored a facility for Travel Agents to open an account very quickly and simply. The Macquarie Bank Client Trust Account is designed to include the following features, subject to your own negotiations and agreement with Macquarie bank:-
Macquarie is an authorised deposit taking institution in all states and territories. Macquarie Business Banking is the retail business banking arm of Macquarie Bank Limited. Macquarie Business Banking has a long history of providing banking services to many financial services and professional services industries.
Please note: A key factor with a Client Trust Account is to ensure that the funds are in fact held in trust and have been properly retained so as not to defeat the trust (eg. not mixed with other company funds). To ensure that you preserve the integrity of the Client Trust Account, we would strongly recommend that you seek independent professional advice to structure your procedures appropriately.
Assuming the client funds are isolated correctly in the Client Trust Account, then the most significant residual risk to those clients’ funds which arises from the threat of fraud or theft.
Many standard Crime or Fidelity Insurance policies may protect Client funds against the risk of fraud or theft to some degree, but because most crime covers exclude coverage relating to Directors and Officers of the Insured, the Client funds would still be exposed to uninsured fraud or theft which would defeat the purpose of the policy.
Another problem with standard Crime coverage is that the Travel Agent is normally the Named Insured under the policy, and therefore there is no tangible value proposition or “peace of mind” that the Travel Agent can provide to their Client.
To overcome these particular issues, our new product provides another tailored solution to support the Travel Industry.
To provide peace of mind to Clients, and a tangible value proposition, the exclusive Fidelity Insurance Policy that we have designed and negotiated will work on the following basis:
The premiums charged for this Fidelity Insurance are commensurate with the value of the maximum client funds held within the Client Trust Account.
For more information or an application form, please contact Gow-Gates Insurance Brokers Pty Ltd.
General Advice Warning
The information in this document is intended as a guide only and should not be relied upon without consulting your relevant insurance policy wording and conditions or conversely seeking independent professional advice. Failure to adhere to this warning could result in a denial of a claim or potential loss or a reduction in settlement of a claim or potential loss.
Gow-Gates Insurance Brokers advises that persons should not act on the material contained in this article as the items are of a general nature only and may be misinterpreted. We therefore recommend that advice be sought before acting in these areas.