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
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If you are ready to speak with a consultant about different business insurance options available, simply enter your details in the form. Keep reading if you want to learn more about the different types of cover available.
The cost of professional indemnity insurance for travel agents varies significantly. Factors influencing premiums include the size and revenue of your business, the specific services you provide, your claims history, the amount of cover you require and the excess you choose. It is always recommended to compare quotes from multiple insurers to find a policy that suits your needs and budget.
Professional indemnity insurance is not legally mandatory for travel agents in Australia. However, since the abolition of the Travel Compensation Fund (TCF) in 2014, it has become even more critical for travel agents to hold their own professional indemnity cover. Some industry associations may also require it for membership or accreditation.
Generally, professional indemnity insurance covers claims arising from your professional negligence error or omission. It typically does not cover financial losses incurred by your clients due to the insolvency or bankruptcy of a third party travel supplier airline or tour operator. This is usually a separate commercial risk. Some policies may offer limited extensions for this but it is not standard cover.
Yes, professional indemnity insurance can cover home-based and online travel agents. The key is that you are providing professional travel agent services regardless of your business's physical location or operational model. It is important to ensure your policy accurately reflects your business structure and the services you offer.
Standard professional indemnity insurance generally focuses on claims related to professional negligence and errors. While some policies may offer limited extensions for data related claims if they arise directly from your professional services comprehensive cover for privacy breaches data loss and cyber attacks is typically provided by a separate cyber insurance policy.
The territorial limits and jurisdiction clauses in your professional indemnity insurance policy determine if you are covered for international claims. Many policies offer worldwide cover but often exclude claims brought in certain jurisdictions like the USA or Canada due to their complex legal systems and higher litigation costs. Always review your PDS for specific geographic exclusions.
Yes, professional indemnity insurance should cover claims arising from your professional negligence error or omission in providing advice regarding visas passports or other essential travel documents. Misinformation or errors in this area can cause significant financial loss or disruption for clients making this a crucial area for travel agent cover.
Yes, a key benefit of professional indemnity insurance is that it covers your legal defence costs even if the accusation of negligence error or omission is proven to be false or unsubstantiated. This means you are protected from the significant financial burden of defending your reputation and business in court regardless of the claim's merit.
If you become aware of a circumstance that could lead to a professional indemnity claim you should notify your insurer immediately as per your policy's terms. You will need to provide all relevant documentation including details of the incident client communication and any advice given. Your insurer will then guide you through the claims process which often involves legal advice investigation and negotiation or defence. It is crucial not to admit liability or offer settlement without your insurer's approval.
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.
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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.
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.
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.
Want protection against liability and negligence claims? Find out why these two forms of cover are essential for many businesses.
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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