Professional Liability Insurance Protection for
Individual Retail Travel Agents & Independent Contractors

By Paula Cartagena

Professional Liability Insurance Protection, commonly referred to as "Errors & Omissions", has become a necessity for all prudent travel professionals. As an individual retail travel agent or independent contractor (IC) salesperson, there is an element of risk intrinsic in your work that may best be addressed by a quality professional liability insurance policy in your own name, to protect your interests.

This is one of the reasons why you should be aware of the insurance protection options that may be available to you. Also, if you work with a host agency that agency should secure a comprehensive "Professional Liability" policy including coverage for "E&O". This is in addition to any standard "Business Owner's", or "General Liability" office policies, which are not usually designed to address professional liability exposures.

The agency's professional liability policy will typically include coverage automatically for all owners, officers and employees. However, coverage for IC's may still need to be addressed. Depending on the number of IC salespeople that are active and the frequency of their turnover, the agency may elect to add coverage for independents on an individual name, or on a group basis. The cost is usually nominal and is often passed on to the individuals who are benefiting from this coverage extension-the independent salespeople. This extension should never be presented as the IC "purchasing" their own policy. If an agency decides to pass the cost to the IC, it should be bundled with all other benefits of joining with the host agency. Remember that you should always request proof of insurance from your host agency. This can come in one of two forms, either a blanket endorsement covering all the host's independents or an endorsement that specifically lists the IC's names.

Since this is an endorsement to the travel agency's policy, remember that the travel agency is the owner of the policy and is fully responsible for all payments and maintains the right to modify the terms of the policy or even cancel it at any time. It is important to represent accurately that the IC is being added to the agency's policy and that the IC does not have all of the same rights and benefits as the primary insured.

For example, the travel agency's policy is amended to include the IC as an additional persons insured only for the work done through, or in conjunction with, the host agency. All IC bookings through other agencies, or perhaps directly with suppliers (without any involvement at all from the host agency, would not be covered under the agency's policy). Also, coverage would not apply to any trade names or company names used by the independent contractor, nor to any individuals that the independent contractor may subcontract or employ. If an IC is working with a number of agencies, books directly with suppliers without the host agency's involvement, or if any of the host agencies do not yet maintain professional liability insurance, it is strongly advisable to look into securing their own policy. If necessary, the IC can then provide proof of insurance to a host agency by requesting a certificate of insurance from their insurance agent.

Also keep in mind that the travel agency's policy limits could be potentially diluted since the limit does not automatically increase, regardless of the number of employees and IC's it protects. The typical $1,000,000 policy limit will be shared by all of the persons insured regardless of the number of employees or IC's that may have been added.

As the landscape of the travel industry continues to change, so do the insurance needs of travel professionals. In response to the growing demand of independent contractors who need affordable insurance protection, Berkely Agency is pleased to introduce their new Value Insurance Plan. The Value Plan is designed to provide coverage for one-person only agencies who do not operate their own tours. If an individual falls into this category, they could possibly qualify for Value Plan premiums that start at $300. The Value Plan policy covers the legal expenses -as well as damages- associated with claims involving: bodily injury, property damage, personal injury and errors and omissions - all on a worldwide policy form.

For further information on professional liability insurance, please feel free to call Berkely Agency at (800) 645-2424 and ask for the Travel Agent 'E&O' Department. Berkely is recognized as the leader in this field with over two decades of experience and their program is endorsed by a host of the industry's most distinguished organizations.

Paula Cartagena
Manager, Marketing & Consortia Programs
Berkely Agency

OSSN Home  |  Canal du Midi  |  The Grand Bahama Experience
Chapter Meeting  |  Power House  |  Liability Insurance |  President's Message