When considering an insurance provider, it’s important to make an informed decision. This is doubly true for Tour Operator Liability Insurance, where both the amount of liability coverage, and a coverage provider’s ability to provide services such as Global Jurisdiction affect the policy holder’s ability to work directly with a cruise line. In order to simplify the process of finding the right insurance policy for your excursion tour, here are the answers to five commonly asked questions.
1. Why is Tour Operator Liability Insurance Required?
Tour operators wishing to work with cruise lines are required by the cruise lines to have insurance, also called Excursion Insurance. This is a different type of insurance than the local insurance your business may need to comply with local insurance requirements, and is needed if you wish to contract your tours with, or be listed as a “recommend excursion” by cruise lines to their passengers.
Cruise lines will only accept tour operators demonstrating insurance coverage in the following areas: contingent general liability; vehicle general liability (when applicable); motorized and nonmotorized watercraft coverage (when applicable). Furthermore, this coverage must include World-Wide Jurisdiction in order to protect passengers from any country, and the insurance provider needs to have received A.M Best Rating of A- or better.
2. What Is the Difference between Tour Operator Liability Insurance and Excursion Insurance?
Tour Operator Liability Insurance, and Excursion Insurance are two terms describing the same type of insurance coverage and may be used interchangeably. There is no functional difference between Tour Operator Insurance and Excursion Insurance.
3. What Is Global Jurisdiction and Why Does It Matter?
Global Jurisdiction, or Worldwide Jurisdiction provides insurance coverage for personal injury and property damage liability claims filed from anywhere in the world.
Passengers of cruises come from a multitude of different countries throughout the world, each with different and complex liability laws. Cruise lines do not expect to be responsible for any injuries, property damage, or loss experienced by passengers while they are on a tour or excursion in port. Instead, this liability may fall to the tour operator.
Costs associated with a passenger injury that occurs during an in-port excursion can quickly become astronomical, and can include local medical expenses, food and lodging for the spouse or family members of the injured party, airlifting the injured person to a different hospital, and other transportation costs if a passenger is unable to return to the cruise.
In addition to global jurisdiction coverage being a prerequisite to a tour operator’s contracting with a cruise line, the minimum liability coverage required for the tour operator’s local laws may not provide adequate coverage for the costs associated with an injured passenger, who may file a claim upon returning home. A dependable insurance company will try to settle that claim out of court to avoid legal fees.
4. What Does Tour Operator Liability Insurance Cover?
There are three basic areas of coverage:
Contingent General Liability
Contingent General Liability, also called Third Party or Public Liability, covers bodily injury and property damage to tourists in your care, custody and control while participating in an excursion tour. This insurance is mandatory for mitigating exposure for any tour operator dealing directly with the public. This includes every service from ziplines or river rafting tours, cultural walking tours or museum tours to vehicle and watercraft rentals.
Contingent Auto Liability
This coverage is excess auto liability coverage over and above your local compulsory automobile insurance and includes coverage for owned, hired and non-owned vehicles.
Contingent Watercraft Liability
Similar to the Contingent Auto Liability, this covers owned, hired and non-owned watercraft having a motor that carries passengers for hire.
Auto and watercraft liability protects the policyholder in the event of damage to the vehicle or injury, loss, and property damage suffered by tour participants if there is an accident, and associated medical expenses.
Insurance policies are usually customized to cover potential accidents based on the types of vehicles and watercraft as well as their function.
5. Is Excursion Insurance Expensive?
No, the cost of insurance is easily offset by the increase in revenue derived from an increase in tour visitors.
Cruise lines are only willing to promote or contract with tour operators who meet their standards for minimum liability coverage, and cruise line passengers are unlikely to research on-shore activities not promoted by the cruise line. Thus, complying with cruise lines insurance policies is the best way to ensure your tour is promoted to passengers.