Dear Travel Agents/Advisors,

Last week we spoke about the Terms and Conditions that TA’s should send to their clients and have them read, initial and sign.  Rather like the way a doctor has patients sign consent forms.  (But, who really reads them?)

Today, let’s talk about E&O (Errors and Omissions) insurance. As a disclaimer, I am not an attorney nor am I an insurance agent. I mentor Travel Agents/Advisors on how to succeed in their business based on my background of having 2 tour operator companies and working directly with the public and travel agents.

E&O insurance is also referred to as “professional liability” insurance and can be a good fit for any business that provides services to clients, especially those that charge a fee for their service. What is E&O Insurance?

Errors and Omissions insurance covers some of the errors and omissions you may make. But it doesn’t cover all errors or all omissions. It is much smarter to think of it as catastrophic insurance – for when something goes horribly wrong. It will not cover the $500 mistake of booking the client in the wrong room – but will cover you if someone sues you for an exorbitant amount. E&O insurance also covers your legal defense. Regardless of the reason for the lawsuit, your legal defense will be covered up to your policy limit, until you are proven guilty. Your legal defense will not be covered for sexual misconduct, intentional acts, and criminal acts. Read your policy carefully. Be sure that if you work with specific groups of travelers or a specific niche that the travel you’re booking is covered.

What Doesn’t E&O Insurance Cover?

 E&O does not cover things like debit memos from the airlines, or if you provided the wrong info for travel insurance. If your error/omission had no negative consequences beyond paying the deductible, and you/your client benefited from the error/omission, that’s a moral hazard. And insurance companies don’t pay for those claims.

Examples:

An agency quotes a client $4,000 for a trip that really costs $5,000. The verdict: Your client is happy because they saved $1,000. You’re happy because the client booked. BUT the insurance companies will call that a moral hazard, accident or not, and will not pay.

Your clients are going on a cruise out of Thailand. You let them know they don’t need any special visas, etc. Due to a flight delay and they miss the cruise departure from Thailand and have to catch up with it at the next port, Vietnam, which requires a visa. They end up missing half of their cruise and sue you for the cost of their trip. The verdict: Your unhappy client did not benefit. You did not benefit and could not predict the flight delay. The insurance company would probably cover this.

Do You Need an E&O Policy?

By law, you’re not required to have an E&O policy in the United States. Everyone has different levels of risk they’re comfortable with. Some host agencies allow their independent contractors to be covered under their E&O policy. Others require that the independent contractor obtain their own.

Are there E&O Policies specifically for Travel Agencies?

Call the company you have your homeowners or car insurance with and ask them for a quote to add E&O insurance to your policy. The price of a policy is based on your total agency sales. Also, make sure to ask your consortia, travel agent associations, and/or host agency about any preferred insurance suppliers to save some money. 

Travel agents should understand E&O insurance will not fix all mistakes. Ultimately, it is about knowing and weighing the risk and doing whatever you’re comfortable with.

Now you know better!

There are other ways to protect the way you do business. I like to teach these things to the TA’s I mentor instead of writing them all out in my blogs.  Feel free to reach out!

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Dear Travel Agents/Advisors,

Since Covid, individuals in the travel industry have found themselves to be targets of class-action lawsuits for refunds and other issues related to the virus, like cancellations. Some even due to travelers getting sick or even dying during a trip.

These are the 99.9% of the cases in which a TA might be named on a lawsuit. A class-action lawsuit allows an individual to sue on behalf of a larger group, called a “class.” The individuals involved are called “class members.” There is no set number of class members. These cases frequently involve consumer claims and can be brought in state or federal court.

It is now very important that a travel advisor’s terms and conditions or contract with the customer contains a class-action waiver. Below is some information from Jeffrey Ment, managing partner of The Ment Law Group.

Let’s review what should be covered in your Terms and Conditions (TCs). You should consult with a lawyer to make sure that you’re on the correct path. There are four key areas that you should address: clients’ consent to be bound by TCs; payment terms; credit card chargebacks; and “force majeure” (our new favorite French phrase).

Securing a Client’s Consent to TCs

It is very important to start off with language that binds the customer to abide by your TCs. I would suggest the following: “By booking your arrangement with us, you are agreeing to be bound by the terms of this agreement and any additional terms and conditions of any supplier that are applicable to your booking arrangements. The lead passenger assumes the responsibility of sharing these terms and conditions with each passenger in their group, including payment of all amounts when due. It is the responsibility of each passenger to read our terms and conditions in its entirety. In addition, we reserve the right to modify these Terms and Conditions.”   Also, be sure to include the phrase: “If there is any part of these terms and conditions that you do not agree with, please do not use our travel services.”

Setting Clear Payment Terms

Travel advisors offer a service that customers should pay for. Charging a service fee is typical, but the key is to advise the customer right at the beginning of the relationship. I recommend including a statement such as: “Planning any vacation takes extensive time and effort before the departure date ever arrives. We have a rate structure to assist with the time spent covering the initial consultation, research and proposal. We will advise you of our fee for your journey. Our consulting fee will be charged at the time of proposal delivery, regardless of whether a client books a trip with us. When a client books a trip with us, this fee also goes toward travel support and the booking of the trip itself. The consulting fees are nonrefundable. We may also collect a commission from the supplier of your trip.” 

Transparency is key. Clients need to know that you are a valuable asset, and that they should expect to pay for your services.

Addressing Credit Card Chargebacks

There is one other key issue to address regarding payment: credit card chargebacks. Your language should state: “We accept major credit cards including Visa, Mastercard, American Express and Discover. Customers must provide a signed charge authorization agreement for every transaction relating to your trip. Your authorization is a binding agreement for us to charge your card, and as such, you waive any right to a chargeback in the case of cancellation for any cause (excepting fraud), including a force majeure event, as defined herein, and agree to refund policies and procedures as outlined in these terms and conditions. In the event a client attempts to chargeback, reverse or recollect a trip payment already made without our authorization, we reserve the right to collect all additional costs, fees and expenses associated with such chargeback, reversal or recollection, including, without limitation, attorney fees.”

The Inclusion of “Force Majeure”

I recommend clearly defining the phrase Force Majeure with this statement: “Force Majeure” means, in relation to our agency, in any circumstances beyond our reasonable control, (including, but without limitation, to acts of God, explosion, flood, forceful wind, fire or accident, war or threat of war declared or undeclared, acts of terrorism, sabotage, insurrection, riots, strikes, civil disturbance, sickness, epidemics, pandemics, quarantines, government intervention, weather conditions, defects in machinery and vehicles, delays or other unforeseeable event), we shall not be deemed to be in breach of these terms and conditions or otherwise be liable to you, and shall not provide any refund, by reason of delay in performance, or by non-performance, of any of our obligations hereunder to the extent that any such delay or non-performance is due to any force majeure. If our agency, and/or any of our travel suppliers, are affected by force majeure, they shall be entitled to, and may in their sole and absolute discretion, vary or cancel any itinerary or arrangement in relation to your trip.”

I know that we are in this business to serve and satisfy our customers, but we need to protect ourselves. These suggestions will help accomplish this objective. Don’t miss part 2 next week. Any questions feel free to contact me!

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Dear Travel Agents/ Advisors,

As you know, I serve as a mentor to travel agents. What I do is free and brings me much pleasure. I frequently get questions from agents asking for advice.  I am here for all of you!

I have spoken with many agents who are eager to get experience in a short time.  Let’s analyze those two concepts: experience, and in a short time.

How long does it take to gain experience in something such as travel? Well, it depends how much we want to know, how much interest we have in specializing in different areas, and how much of a perfectionist we are.

How much time should we invest in learning? It also depends on several factors. How we learn, how much we need to learn, and how much work we are willing to put in.

As a travel agent, you approach your “mentor” (me) and get a bunch of ”it depends” answers. What kind of mentor am I?

Let me give you my honest opinion on the issue of gaining experience in a short time. I feel that if you show your client or prospective client how much you really care, experience moves down in importance to second place.  People are looking for a professional who has real feelings and a big heart, and who will stand with them for the entire journey. Experience alone is not enough. Experience PLUS caring will put the world at your feet!

I am cheering for you! Everyone should learn at their own pace.

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Dear Travel Agents/Advisors,

I love mentoring and coaching Travel Agents/Advisors with their businesses. One area where I was and still am very successful, is on how to close a sale. I am not going to bother you with why and where I learned all the psychological pieces of closing a sale, but if you follow my advice and give them a try, and believe in your own skills, success will definitely follow.

Clients need to feel as though they have the power to make a decision. Let them be in charge by giving them the last word. For example: Instead of asking IF they like a certain vacation package, or when they might be ready to book and pay, ASK THEM IF IT WILL BE VISA OR MASTER CARD? Don’t be surprised when they reply by asking if you accept American Express. You asked them a question and gave them the power to making a decision.

Since most sales take place over the phone, keep in mind that what clients hear is exactly how you express yourself. I HIGHLY RECOMMEND the use of a mirror when you talk on the phone. What you see is what they hear. Keep smiling, be assertive, be kind and pay attention during the conversation. You will be your best self when you are totally present for your client.

In the event that your client comes to you with “another company/ TA came back with a better price” story, don’t take it personally. First of all, thank that client for being honest and telling you that. Then ask the “questions” but don’t pause to hear the answers – just continue planting seeds of doubt in his/her mind. Ask if the “other company/travel agent” included ALL entrance fees? All transfers? If they will be available for any inconveniences whenever they occur? If the hotel is really a 4-star by American standards or 4-star by that country standards?

By doing this, you show that you are interested in your client’s “worry free” vacation as much as a doctor would be concerned with the patient’s health (you can even use those words). After all, a good TA is like a good doctor. Both are concerned with the person enjoying their time in the best way possible. Value is what you are offering.

I have many more tips on how to approach a client. I will be sending them out weekly in my blogs. If you want them sooner, feel free to contact me. I love sharing my knowledge!

Cheers!

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