For companies looking for new tour operator’s liability insurance, and even for firms who are well-seasoned in the process, finding a great policy can be a confusing experience. Excursion insurance is often mistaken for the type of insurance cruise passengers can purchase to protect them in the event of an illness or injury while they are traveling—that type of coverage is referred to as short term insurance or traveler’s insurance. In this post we will address the five most commonly asked questions about tour operator’s liability insurance.
1. What Is Excursion Insurance?
There IS a difference between excursion insurance and traveler’s insurance. Traveler’s insurance is for individuals who are traveling as passengers, whether as part of a package with a tour operator, or on a cruise, or simply traveling on their own. This protects them in case they need medical assistance while overseas. Excursion insurance is for cruise lines or tour operators who wish to indemnify themselves for the operation of their business.
2. Is Excursion Insurance the Same as Tour Operator Insurance?
YES. Excursion insurance and tour operator insurance are two terms that both describe the type of insurance which covers the tour operator or cruise line that is providing the service of a tour or excursion.
3. What Does Excursion Insurance Cover?
There are various types of coverage which may be appropriate for your business depending on the type of excursion you offer. Each policy is different, so it is best to speak with an expert in person or over the phone to address specific questions about your business and what policy will best suit your needs.
Excursion insurance is intended to cover such issues as general liability, subcontractors, non-owned hire aircraft and watercraft, personal injury liability, fire, host liquor liability, bodily injury and property damage liability, and professional liability (errors and omissions).
4. Why Is an A.M. Best Rating Required?
All ground excursion operators working with cruise lines must carry liability insurance from a reliable carrier with at least an A- rating from A.M. Best's Consumer Insurance Center. The rating guarantees that your insurance company will be able to meet its financial obligations if necessary. An insurance company with a lower rating is not acceptable. A.M. Best analyzes the credit rating and standards of each insurance company. The annual balance sheet and business profile are reviewed along with the businesses that are covered.
5. Why Is Worldwide Jurisdiction Required?
Jurisdiction refers to the legal environment which will apply to a contract of insurance. Tour operators contracting with cruise lines must have worldwide jurisdiction insurance from a company that works with tour services in many countries since worldwide jurisdiction for liability is not limited to the country where the tour service is located. Worldwide jurisdiction can benefit cruise line passengers who are injured or suffer losses due to negligence since they can file claims or a suit against a tour operator from anywhere in the world.
Insurance can be a confusing and complicated world to enter for those not accustomed to the various requirements and laws surrounding their particular policy needs. Thankfully, you, as a savvy excursion or tour operator, are now familiar with the basic requirements and industry standards for your business and will have some context when you start shopping for tour operator’s or excursion insurance of your own.