Would you consider travelling abroad without a valid passport?

Then consider the consequences of running your Travel Agent Business without Professional Indemnity protection.

BY GOW-GATES INSURANCE BROKERS

As a Travel Agent or Travel Wholesaler, you are a specialist in your very own professional field. The law requires that you exercise the required skill to an appropriate level expected from Professionals such as yourselves. Your liability arises the minute you fail to provide this level of skill which could result in an award for damages being given to a third party who suffers the loss. Travel professionals are indeed just that, experts in travel and just like an accountant or doctor, you too need to have this insurance to cover you for alleged breaches of your Professional Duty.

Professional Indemnity Insurance will compensate for the damages awarded against the Insured plus any costs or expenses incurred in defending the claim brought against you, (subject always to the terms, conditions and exclusions contained in the actual policy).

Arranging travel for clients is not an easy task as you well know. There are so many components to a trip that can go wrong. Unfortunately, when things do not go to plan, the first thing that comes to mind is to blame the agent, whether you are responsible or not. What happens if you find yourself in this situation?

Whilst I know every travel agent out there would love to have people travelling right now, this time is an opportunity to understand so much more about the “business” of travel and how Professional Indemnity cover works. We look at scenarios where you are accused of Professional Negligence. Below we will discuss the importance of Professional Indemnity Insurance along with a refresher on some practical guidelines that you can follow once an incident arises which may give rise to a claim.

It is VERY important to understand your Professional Indemnity Policy is a “Claims Made” policy which is different from normal property and public liability type policies.

A “Claims Made” policy means that the policy needs to be current at the time of a claim being made against you.
Regardless of when the incorrect advice or error was made, if you do not have a Professional Indemnity Policy current at the time when you become aware of the issue, you will not have any insurance protection. 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.

At a time when no one is travelling as a result of COVID 19, there is a misconception that this insurance is not required – nothing could be further from the truth. If you have let your policy lapse, you should investigate obtaining a replacement policy as a matter of urgency.

Another misconception about Professional Indemnity is that the policy covers errors that result in you losing money – this is normally not the case. The policy is there to protect you in the event that you make an error or a misrepresentation which causes your passengers to suffer a financial loss.

Practical Tips – Try to avoid an Incident before it happens

• Put all your communications in writing – your terms and conditions, details of what your client has instructed you to do etc. It is hard to argue when the facts are written and documented.
  
  
• Communication with colleagues – numerous claims arise when two consultants are involved in one travel program. Each thought the other consultant had addressed the matter which ultimately led to a claim. Document all actions on the same sheet of paper for all to see or have a file note logging system on your computer program which can be updated and then dated by staff.
  
  
• Don’t assume – don’t assume that because one passenger is travelling on a specific passport/visa that their partner will be doing the same.
  
  
• Staff Training - ensure that all staff follow standard procedures and that your less experienced staff are supported and educated.
  
  
• Checklists and audits – before finalising a booking, a simple process of double-checking even the most basic details such as ticketing dates, deadlines for deposits, confirmation from suppliers, issuing of your terms and conditions to clients. Even a section of the documentation or declaration for clients to sign confirming they have checked and all is in order could be beneficial - all of these little things can save you from complicated situations that could potentially cost you thousands in time and money.

Why not use this hibernation time to put in place processes that can streamline and protect your business to avoid issues in the future?

Practical Tips – When an incident does occur

• It is imperative that you inform your Insurance Broker as soon as you become aware of a circumstance that may lead to a claim.
  
  
• Make detailed notes of any conversations with parties involved while they are fresh in your mind.
  
  
• DO NOT admit liability or reply to any letters of demand (other than an acknowledgement of receipt of the correspondence). Forward any such documents immediately to your Insurance Broker for provision to your Insurer.
  
  
• You should always seek advice from your Insurer prior to engaging the services of a solicitor (it is likely that if you have a situation that is covered by the policy the Insurer may appoint Lawyers on your behalf).

Remember, should any circumstances arise which may result in a claim, you must immediately notify your insurance broker as any delay in notifying the insurer may result in your insurer refusing to accept your claim.

If you would like further information, please feel free to contact Rebecca Fleming, Account Manager of our Special Programs Division at Gow-Gates Insurance Brokers on (02) 8267 9919 or rfleming@gowates.com.au to discuss your circumstances or to obtain a quotation.

General Advice Warning – the information in the above article is intended as a guide only and should not be relied upon without consulting your relevant insurance policy wording and conditions or conversely seeking professional advice from either your insurance broker or insurer regarding a claim or potential loss. 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.