Travel advisors should have insurance to protect against financial damages in case of lawsuits resulting from significant errors or liability claims. This includes situations like booking a flight on the wrong date, causing clients to miss a leg of their trip and lose money on rebooking and canceling hotels and experiences, and other situations in which a client or another business holds an advisor responsible and decides to sue. Industry-standard insurance policies like E&O may be required in certain situations, like when independent travel agencies apply for IATA or IATAN accreditation or when operating under an LLC.
Disclaimer: This article provides general guidance for travel advisors in the United States, but it isn’t a substitute for advice from a legal or tax professional.
3 main types of insurance for travel agents
1. E&O insurance
Also called professional liability insurance, E&O insurance protects advisors from lawsuits and financial liability if they make a major mistake when booking transport, activities, and lodging for clients.
E&O insurance covers:
Booking errors: Misspelling names on reservations, booking the wrong dates or incorrect supplier, non-refundable mistakes
Missing travel information: Failing to tell clients about visa or passport requirements, or necessary vaccinations
Bad advice: Recommending a supplier or activity that doesn’t meet client expectations, like a hotel with major construction or tour itinerary that changes due to known closures
Supplier issues: Client claims against you for supplier errors, like canceled flights or reservations
In the scenarios where E&O insurance is applicable, the policy will cover legal fees to dispute a client’s claim and either the reimbursement for the extra money they spent due to the advisor’s mistakes or a settlement amount.
E&O insurance doesn’t cover:
Minor errors: Errors underneath your policy’s deductible threshold
Physical injury: Client injuries in your place of business
Property damage: Damage to your client’s baggage, personal items, or a business property
Deliberate acts: Fraud or criminal acts you commit
E&O insurance doesn’t cover all potential mishaps, so make sure to read your policy and compare policies carefully. Some policies, like Berkshire Hathaway’s, will defend an advisor if a client sustains bodily harm during a trip and blames the advisor.
While not usually legally required, E&O insurance is an important precaution in case a client decides to sue.
2. General liability insurance
General liability insurance is for instances when a client holds a travel advisor liable for damaged property or personal harm leading to medical costs or lost income.
General liability covers your responsibility for:
Injuries during a trip you planned and booked
Injuries while visiting your office, if you have one
Defamation related to your advertising
Copyright infringement related to your advertising
General liability insurance doesn’t cover professional mistakes, which is why it’s additive rather than duplicative to E&O insurance.
Host agencies sometimes offer general liability coverage in addition to E&O, potentially for an additional fee.
3. Travel insurance for clients
Travel insurance for your clients is separate from your protection and covers unforeseen circumstances that derail the itinerary, like flight cancellations, medical emergencies, and misplaced luggage. This layer of trip protection safeguards the client’s investment and ensures compensation, where eligible, even on non-refundable bookings.
Your clients aren’t required to have travel insurance, but it’s recommended for high-cost trips. Advisors earn a commission when selling travel insurance to clients, often at a higher base commission than other suppliers provide. Clients can buy insurance up to 24 hours before their trip, but it’s best to get a policy at least two weeks in advance of travel. This covers them in case of emergencies leading up to the trip, or if they want time-sensitive coverage like a cancel for any reason (CFAR) add-on.
How does insurance work under a host agency?
If you’re affiliated with a host agency, most of what you need to understand sits in your host’s master E&O policy. Most host agencies cover independent contractors and employees under their master policy, but not all do. It’s less common for host agencies to provide general liability coverage.
If you become a Fora Advisor, you’re covered by our E&O insurance for any claims filed against you in the United States. Advisors operating under an LLC, booking more than $500,000 a year, or not clearly associated with Fora should have their own policy. If you consistently book high-value or non-refundable trips, you should also consider your own E&O policy.
When evaluating a host agency’s E&O insurance coverage, ask:
Are advisors covered, and how are they defined?
Are there per-claim and aggregate claim limits?
What’s the deductible?
Is tail coverage included if I leave the host agency?
Are there any exclusions?
How much does travel agent insurance cost?
Standalone E&O coverage typically runs $650–$850 per year for $1 million in coverage, with deductibles starting around $500. The cost of your E&O plan depends on factors like:
Your annual sales volume: Higher sales translates to higher rates, since the risk of a claim is higher.
Type of travel you book: Cruise and adventure travel comes with higher risk than leisure travel.
Claims history: Past claims can increase your rate, like other types of insurance.
Coverage limit and deductible: Lower deductibles and higher coverage can both increase your rate.
General liability is generally less expensive than E&O, and can sometimes be bundled with other types of insurance coverage. If you plan to rely on your host agency’s policy, your only insurance cost is your host agency fees.
Note: Costs vary by insurance provider and your situation. Get a tailored quote before you budget.
Frequently asked questions
Do I need standalone coverage in addition to host coverage?
Not right away. If you’re covered by your host agency’s E&O insurance, you’ll mainly need additional coverage if recommended by your agency or if you regularly book high-value or non-refundable trips. Check the policy’s deductible, the number of agents covered, and both the aggregate and per-claim limits. If you notice gaps in the host agency’s policy that you’re not comfortable with, you can also get your own plan in addition to what’s offered.
Is travel insurance the same as travel agent insurance?
No, these are two different products. Travel insurance protects your clients on a trip, covering things like flight cancellations, medical emergencies, and lost luggage. Travel agent insurance protects you as a business from claims and lawsuits tied to your work—usually some combination of E&O and general liability. Advisors sell the first to clients and carry the second for themselves.
Where should I look for insurance?
There will be multiple companies in your state with E&O policies specifically geared toward travel advisors and agencies. Your host agency may have partnerships with specific insurance companies that provide preferred rates. Fora partners with Berkshire Hathaway, for example. You can also work with an independent insurance agent to compare policies and rates to get the best policy for your needs and budget.
How much E&O coverage do I need?
Most solo advisors carry a policy that pays up to $1 million for any single claim and up to $2 million across all claims in a year. Advisors who book higher-value trips, run groups, or have employees often step up to a policy that pays $2 million per claim and $4 million per year. If you’re on a host’s master policy, those limits are set for you. Ask what they are, and consider adding your own coverage if the per-claim number looks light for the trips you book.
Are there insurance requirements for state licensing or Seller of Travel registration?
Not usually. California, Florida, Hawaii, and Washington require Seller of Travel registration. Affiliated advisors can usually register under their host agency, which excludes them from related insurance requirements as long as their host is covered. There are a few scenarios in which having E&O or general liability insurance is mandated. Student tour operators in Florida, for example, are required to have both E&O and general liability insurance. Your host agency or a legal professional can help you ensure you’re compliant.
