Whenever anyone is planning a vacation, they always consult a travel agent to make their journey a seamless experience without any hassle. Be it booking flights, planning accommodations, outings, or buying travel insurance, a travel agent oversees multiple aspects to ensure a smooth trip.

But regardless of how much experience and meticulous planning a travel insurance agent has,  there is a possibility of mistakes that can lead to unhappy clients, negative reviews, or even legal actions.

If you belong to the travel industry, work in this field, especially as a travel insurance agent, then you must know about Errors and Omissions Insurance (E&O Insurance).

In this blog, we will discuss E&O insurance. Why it is essential for travel agents, what it covers (and doesn’t), and how you can find the right policy to protect your travel business.

What is Error and Omission Insurance?

Errors and Omissions Insurance is basically professional liability insurance. It protects businesses and travel professionals offering services or advice.

Key Coverages -Error and Omission Insurance

  • Booking on the wrong dates.
  • Forget to mention the visa requirements.
  • Negligence, for example, failing to follow up on a promised service.
  • Misrepresentation refers to offering inaccurate information, even unintentionally.

The plan helps cover legal costs, settlements, and judgments if a client sues you over a professional mistake or failure to deliver promised services.

Why Do Travel Agents Need E&O Insurance?

A travel insurance agent is responsible for handling numerous complex arrangements, including airlines, hotels, tour operators, rental car agencies, and more. Therefore, even the smallest of errors can have significant consequences.

Why is it a must for a travel insurance to have E&O Insurance?

Missed Hotel Booking

Suppose, as a travel insurance agent, you have booked a honeymoon trip for your client but forgot to finalise the hotel booking. The couple arrives and finds they have no place to stay.

Outcome: The couple is likely to take legal action against you for their emotional distress and the cost of a last-minute hotel booking.

Sharing Incomplete Travel Information

You arranged a trip for a family abroad but failed to tell them that they needed a visa. So, they are denied boarding at the airport.

Outcome: The family is likely to demand compensation for lost travel costs.

Incorrect Itinerary Shared

You sent your client to the airport with an old itinerary, resulting in the wrong flight time.

Outcome: The client is likely to still take legal action against.

Defending against such claims is likely to be time-consuming and financially draining. E&O insurance acts as a financial safety net in these situations.

Also Read: Travel Insurance Glossary

What are the Inclusions and Exclusions Under E&O Insurance?

Refer to the table below to understand what E&O Insurance covers and what it does not:

Inclusions

Exclusions

Attorney fees, court costs, and legal representation, even if the claim is baseless.

Intentional deception or illegal acts.

Payouts for valid client claims, up to the policy limit.

Physical harm or damage is covered under General Liability Insurance, not E&O coverage.

Unintentional mistakes that result in financial loss to the client.

Workplace disputes, such as harassment or discrimination, require Employment Practices Liability Insurance (EPLI) coverage.

A client's claims of incorrect or incomplete information provided to them.

E&O Insurance does not cover the loss or theft of client data. It comes under Cyber Liability Insurance.

Key benefits of  E&O Insurance for Travel Agents?

  1. Professional Credibility: When you have an E&O insurance plan, it reflects that you are responsible and professional, and these qualities are likely to appeal to your clients and partners.
  2. Business Continuity: One lawsuit could financially affect your business, and on the plus side, if you do not have E&O insurance. It could be a big trouble for you with respect to business continuity.
  3. Built-in Client Confidence: Some corporate clients or vendors ask for E&O insurance details of your company before working with you.
  4. Ensures Peace of Mind: When you know you are covered against clients' complaints or lawsuits, you are more likely to focus on growing your business.

How to Choose a Perfect E&O Policy?

When buying Errors and Omissions insurance, always make sure to keep in mind the following factors:

  • Go for an Experience Insurance Provider: Always prefer an insurance provider with good experience in the travel industry. They will understand the unique risks that travel agents are likely to face. Some insurers offer policies specifically designed for travel professionals. So, you can check them out.
  • Adequate Coverage Limits: Generally, policy limits fall somewhere between INR 25 lakh and INR 2 crore. Select the sum insured depending on your risk exposure and client profile.
  • Claims-Made vs. Occurrence Policy: Most E&O policies are claims-made. It means they are only covering the claims made during the policy's active period. Therefore, it is crucial to maintain continuous coverage, even when switching providers.
  • Check for Deductibles: Check what deductible you will have to pay out of pocket for each claim. The lower the deductibles, the higher the premiums.
  • Read the Fine Print: Always read your policy guidelines carefully. Additionally, if you have any doubts, please do not hesitate to clarify them with your insurer or broker, such as Policybazaar.com.

To Conclude

No matter how experienced or diligent you are, mistakes can happen. And the most crucial part is - customers can be really quick to seek compensation when things go wrong. So, a simple slip could cost you thousands or even your business.

Also, considering the nature of your business in today’s super-connected world, errors and omissions insurance is not just an option that they can choose to buy. Instead, it is a smart and essential investment. Whether you are just starting or have years in the industry, having the right protection allows you to operate with confidence, professionalism, and peace of mind.