As a travel agents you are at risk of being accused of failing to perform your duties.
Professional liability insurance can cover you for legal fees if someone tries to sue you.
If you are found to be negligent, Professional liability insurance can also pay for damages.
What does professional indemnity insurance cover?
Costs associated with court attendance and legal advice
Loss of monies for which you are legally liable
Negligence claims from errors or incorrect advice
Civil liability claims resulting from your business activities
Intellectual property rights infringements such as copyright or trademark breaches
Loss of documents for which you are legally responsible
Run-off cover to cover claims arising at a later date from a previous business or practice
Public relations expenses incurred in protecting your reputation, if damaged by a claim
Costs associated with official investigations and enquiries.
As a travel agent, you provide a professional service to your clients, advising them on travel itineraries, accommodation packages, travel insurance and more.
What claims? Any claim of negligence, error or omission that causes your client to suffer a financial loss. It might be unsubstantiated, but you still have to defend yourself in court and professional indemnity insurance pays your legal costs plus any damages that might be awarded to the claimant.
Make sure you read the Product Disclosure Statement (PDS)
2022 Finder research shows that 23% of Australians can't be bothered reading the PDS. A PDS includes a comprehensive list of all the inclusions of a policy. Make sure you are covered for what you need.
Finder survey: How often do Australians of different ages compare or switch their professional indemnity insurance?
Response
75+ yrs
65-74 yrs
55-64 yrs
45-54 yrs
35-44 yrs
25-34 yrs
18-24 yrs
once a year
2.33%
1.86%
0.58%
0.97%
1.18%
1.46%
1.43%
I never compare or switch
2.48%
2.92%
0.48%
0.79%
2.43%
1.43%
once every 3+ yrs
1.24%
0.58%
0.97%
1.18%
2.91%
2.86%
every 2 yrs
1.17%
0.97%
0.39%
0.97%
4.29%
more than once a year
0.48%
0.49%
1.43%
Source: Finder survey by Pure Profile of 1112 Australians, December 2023
How do I compare indemnity cover for travel agents?
The best way to find the right professional indemnity insurance is to compare a number of policies from different insurers. Some of the things you should look for when comparing include:
The amount of excess you must pay and whether it includes or excludes costs (legal fees)
Whether the policy includes run-off cover (cover for work you performed in the past)
Whether there are adequate reinstatements of the insured amount, in case you have more than one claim in a year
Whether the policy provides cover worldwide or only within Australia
Whether the policy provides cover worldwide or only within Australia
Whether the policy is specific to travel agents and clearly defines the exposures that are covered
What exclusions apply and whether they overly diminish your cover
The cost of the premiums and whether they reflect the cover provided
Whether the premiums are CPI-indexed to keep pace with inflation.
Consider an adviser
Professional indemnity insurance policies vary widely with insurers, so given that you will be seeking protection from claims that could run into the hundreds of thousands of dollars, it would be wise to seek advice from an insurance broker or your industry association, if you are at all unsure about what a policy contains.
Will I need public liability cover?
Public liability insurance is usually offered at the time of taking out professional indemnity insurance. Why would a travel agent need it? The same reason as any professional who deals with the public, to protect themselves from claims of personal injury or property damage.
As a travel agent, you undoubtedly have a place of business and when clients visit you there, you are exposed to the possibility of them slipping, falling, tripping or any manner of accidents that could occur on your premises.
It will usually cover your business, including subsidiary companies and your employees, provided they are performing their normal duties at the time of an incident.
What is doesn't cover
It will not cover any unlawful activity on your part or deliberate acts of damage or injury. Public liability insurance is usually very affordable and is a must-have for any business that has dealings with the general public, including travel agents.
The Travel Compensation Fund (TCF) was a regulatory framework for travel agents introduced back in 1986 to compensate customers who suffered losses when travel agents went bankrupt and failed to provide refunds or equivalent travel arrangements.
It was replaced in 2013 by the Travel Industry Transition Plan, which aimed to phase out by July 2014 both the Travel Compensation Fund and compulsory licensing for travel agents.
The growth in online travel agents and direct bookings was seen to have reduced the relevance of the TCF and was unfairly disadvantaging local travel agents, whose online competitors were not subject to the same regulations.
The old system has now been replaced with a voluntary industry-operated and accredited system for travel agents and a consumer advocacy body to deal with consumer issues.
Given that the TCF no longer exists, professional indemnity insurance has never been more important for travel agents, as clients who suffer financial losses will now be seeking compensation through any means at their disposal.
IMPORTANT:Travel agents no longer need to be licensed or be member of the Travel Compensation Fund (TCF). If something does go wrong, only consumers who purchased products before 01/06/2014 will be eligible for compensation for their losses from the TCF.
Talk to a broker about professional indemnity insurance for travel agents
Frequently asked questions
Because if a claim of negligence, error or omission is made against you, you will have to defend yourself in court, whether there are grounds to the claim or not and legal fees are not cheap.
Yes you can. Income protection is a seperate type of cover to indemnity. This type of insurance provides you with income replacement in the event of an injury or serious illness that leaves you unable to work.
A failure to fulfil your duty of care towards another, with the result that they suffer a loss.
Normally at least $1 million, but a lot of businesses choose cover for between $5 million and $10 million.
The application process can be relatively easy these days. You can usually fill out an application form online, give any necessary additional information over the telephone and have cover within 24 hours.
It indemnifies you for claims that arise from strict liability, where negligence is not an issue.
A costs-inclusive excess means the excess you pay goes towards the legal costs, while a costs-exclusive excess lets you pay it towards the settlement instead, giving you a breathing space before it must be paid.
The retroactive date is the date from which you are covered by the policy for any act of negligence, error or omission.
As soon as you become aware of it, otherwise your cover could be denied due to a 'known circumstance'.
Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance. See full bio
Why do accountants need professional indemnity insurance? Why do they need public liability insurance? This article looks at the many risks that accountants are exposed to in the course of doing business and will hopefully convince every accountant who reads it that PI Insurance is not something they can afford to be without.
Nursing is a vital profession in hospitals and nursing homes around Australia, but the people who work as nurses are exposed to a unique range of risks. If a nurse were to make a mistake or an error of judgement — for example administer the wrong medication, fail to follow a doctor’s instructions or give incorrect advice to a patient — they could find themselves the subject of a lawsuit for a breach of their professional duty.
This is where professional indemnity insurance shows its worth. This type of cover offers much-needed financial protection for nurses against claims of negligence or malpractice. It covers the cost of your legal defence as well as any compensation you may be legally required to pay to a third party. Public relations costs to repair your professional image are also covered by professional indemnity policies.
In order to find the right professional indemnity insurance policy for you, compare policies at finder.com.au and seek advice from colleagues. Compare quotes from a number of insurers and seek help from an insurance consultant if required.
Hi, I am looking for a quote on getting Travel Agent indemnity insurance. My business partner and myself both work independently from home. Would like to speak with an advisor please.
JonathanAugust 16, 2017
Hello Greg,
Thank you for your inquiry.
You can fill out the form “Compare Travel Agent Professional Indemnity Cover” and click “Enquire Now” green button to have your details forwarded to a licensed insurance advisor.
Hope this helps.
Cheers,
Jonathan
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Hi, I am looking for a quote on getting Travel Agent indemnity insurance. My business partner and myself both work independently from home. Would like to speak with an advisor please.
Hello Greg,
Thank you for your inquiry.
You can fill out the form “Compare Travel Agent Professional Indemnity Cover” and click “Enquire Now” green button to have your details forwarded to a licensed insurance advisor.
Hope this helps.
Cheers,
Jonathan