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Insurance - a message from Gow-Gates Insurance Brokers

The ATAS Charter stipulates that both Professional Indemnity and Public Liability Insurance is mandatory for all ATAS Participants. The below is a message from Gow-Gates Insurance Brokers which explains why these insurances are important in your risk mitigation strategy and to help you understand why the ATAS Charter requires these insurances as a minimum standard for the industry.

As a business owner, Insurance is a critical element of risk mitigation. When it comes to running any business, it is a basic necessity to ensure that your business is adequately protected.

As a Travel Agent, taking out both Professional Indemnity and Public Liability Insurance is required to protect the business against claims made by third parties. For a relatively low cost, these covers can protect your business from significant claims and damages.

Many Travel Agents are now running their business from home and whilst there are benefits attached to this such as saving on rental costs, having flexible working hours , avoiding traffic and public transportation, along with the benefits there are risks for things to go wrong.

Accidents happen and can be unplanned, unexpected and unintended. However, being held responsible can be very costly, not just in payments to the injured people but the legal costs involved to defend yourself as a business owner as well. Laws here hold us responsible if we cause others loss, injury or damage. These responsibilities are often known as your Legal Liability - the liability your business has for the effect of its actions or property on members of the public.

While you may assume that everything will be covered under your home and contents insurance, this is not necessarily the case when it comes to operating a home-based business. Whilst we strongly recommend that you arrange for any tangible property such as office equipment, contents, computers etc to be covered under your Home and Contents Insurance, the Liability aspect of cover is protecting you from domestic liability and does not cover liability arising from the operation of a business.

On the rare occasion, if you meet up with a client over coffee, or a supplier or if you happen to attend a conference or any other business related matter anywhere within Australia, the domestic liability will not pick up any liability claim that may arise. 

‘It is better to have insurance and not need it than need insurance and not have it ‘ and as an AFTA accredited member both Public Liability and Professional Indemnity insurance are mandatory.

Professional Indemnity insurance

As a business person running a company with a particular skill you are a specialist in your field. The law requires that you exercise the required skill at an appropriate level expected from such professionals. Your professional liability arises when there is a failure to provide this level of skill, which could negatively impact on a client (usually in a monetary sense).

Professional Indemnity insurance can assist with the damages awarded plus any costs or expenses incurred in defending the claim. As your business grows and you gain more employees, your risk will increase and it is important that you are sufficiently covered.

One very important point to remember about your Professional Indemnity Policy is that it is on a claims-made basis. This means that you must have a policy current when a claim is made irrespective of the date the failure occurred. Sometimes there can be a large gap in time between when the actual or alleged failure occurred and when the claim is first brought against you.

Also, it is crucial that your business activities are correctly described – if you have a Computer Programmer who sometimes provides Help Desk support as well, your policy must refer to both activities.

As with any insurance, this is always subject to the terms, conditions and exclusions contained in the actual policy. Some important exclusions are:

  • Trade debts – the policy will not apply if you or your staff make an error that leaves you out of pocket; it is to cover your civil liability that leaves a client out of pocket
  • Misquotes – if a quote is incorrect it will not be covered by the policy
  • Insolvency of suppliers is not covered
  • External fraud from third parties outside the company is not covered

Public Liability insurance

While Professional Indemnity insurance covers your liability for a breach of your professional duty (from the provision of advice), Public Liability insurance covers you for your legal liability for bodily injury or property damage to third parties, including customers.

These injuries may be a result of slips and falls, bumping someone accidentally, or accidentally damaging the property of others, and these can arise either at the business office, the business office contained within a residence, or away from the office while fulfilling the duties of your business.

As with Professional Indemnity insurance, as your employee numbers and need for space increase, so does your risk of accident to a third party and your need for Public Liability insurance.

Should you be unfortunate enough to cause one of these incidents and you do not possess adequate liability insurance you will need to mount your own defence, often a costly exercise. Should you lose; any damages awarded to third parties will need to be funded from your own resources which may involve the liquidating of assets, both business and private, if other resources are not available to you.

When you own a business, whether it be a shop front, home-based or an online business you do have exposures and you do need Public Liability insurance.

Public Liability insurance excludes the following:

  • Any unlawful activity
  • Any deliberate act to cause damage or injury
  • Personal injury to you or your employees
  • Property damage suffered by you or your employees

While both of these covers protect your business against legal action and compensation awards to third parties, they are actually designed to offer different forms of protection in your business activities.

One of the key differences between the covers offered is around the nature of the work that you carry out. If a third party suffers injury or damage to their property as a direct result of any physical work or (presence) you undertake, then Public Liability would protect you, whereas Professional Indemnity would protect you if the risk is linked to your professional duty when providing advice.

Gow-Gates can be contacted at:

Phone: 1300 165 116