3 types of insurance all tour operators need

As a tour operator you’ll be dealing with risk on a daily basis. On top of the typical risks that a business will face, you have the additional risks that come with your industry. For example, what happens if you have to cancel your tours due to weather or insufficient numbers? What if your licence and permit fees and conditions change unexpectedly? What if a customer gets hurt while on your tour? Here are the 3 types of insurance all tour operators need to manage these risks and protect your business.

1. Assets & revenue

While the specifics will vary depending on the nature of your tour or activity, you need to take all areas into consideration. This refers to things like:

  • Breakdown and damage of business assets (fires, burglary, general property, equipment breakdown). All Australian businesses have to insure company vehicles for third party injury liability. Your investment in equipment or property is put at great risk if you don’t insure it.
  • Business interruption (any interruption to the business which stops the business from making money, while you still have bills to pay). It includes interruption through a key person’s illness or bad weather.

Let’s take a kayaking tour and hire operator as an example. If their premises were to catch fire and the building along with its contents were lost, they would lose money on bookings that would have to be cancelled, rent that still needed to be paid, wages to their staff and all of the other regular expenses they have. A claim will pay for the expenses of the business while they are unable to operate due to an insurable loss.

2. Liability

This type of insurance will free you from responsibility if someone gets hurt or their belongings are stolen while on your tour.

While it is very costly (the standard is $10M), most agents will refuse to resell you unless you have public liability insurance as well as all the relevant permits for business.

Remember that if you work with a third party contractor, you will need to make sure that they have public liability insurance in place as well.

3. People

You are legally required to take out workers compensation insurance for your employees.

In doing so, you’re protecting your business against costly compensation claims as a result of workplace accident or illness.

In Australia, workers compensation has to be taken out for all employees of a Pty Ltd company, including company directors and business owners.

However, business owners aren’t covered by workers compensation if they are a sole trader or a partnership. In this case, you can cover yourself for income protection in the case of accident and illness so you don’t lose revenue while you recover.

Where to look for Tourism Insurance

Without the right level of cover you may be out of pocket after a claim.

Start your search by:

  • Getting quotes from those specializing in tourism insurance
  • Asking others in the industry for recommendations
  • Contacting your local tourism organization and ask them for recommendations

It’s important to find a policy that’s right for your business, so shop around instead of jumping for the first quote you see.

If you enjoyed this article – 3 types of insurance all tour operators need – then follow the Rezdy blog. There are a lot of marketing tools and resources designed with businesses like yours in mind.

Start your free demo or trial of Rezdy today.

Image credit: Catrin Johnson

 

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Simon Lenoir, Founder and CEO of Rezdy Online Booking Software
About Simon Lenoir

Simon has over 15 years’ experience as an IT professional. He also has extensive experience in the travel industry from being an around-the-world traveller and managing a dive centre in Southeast Asia for over 3 years. Simon is now dedicated to providing the best online booking solution for tours and activities operators; he is the brains behind Rezdy.Outside office hours Simon is a true activity addict – mountain biking, sailing, swimming, beach volleyball – just to name a few. But most of all he loves diving in Australian waters.

8 Comments

  • I am starting a tour business in the Caribbean. I will not own the vehicles and will not have employees. I will be marketing the tours in the US, collecting the money, and paying the drivers to perform the service for me. The drivers have their own vehicles and their own “business” which includes insurance. Any advice on the insurance I should secure for this and any other suggestions are appreciated.

  • Hello, I work at the moment like a tourist guide in Ireland, and I start the bikes tours. I am looking for a insurance for me but I don´t know which is better…could you please help me? thank you

    • Hi Andrea,

      To get specific insurance advice, I’d like to recommend you to contact an expert. Every country has different laws and legalization. Maybe, having a call with industry peers might help you to get you started too.

  • I’ve been a tour guide for some years in Paris. I’m starting up a company now but I have no idea of what kind of insurance are needed to run a tour operator company here in France. We give walking tours on the city streets and inside monuments and museums like the Louvre. Do you have any tips? Thank you!

  • Interesting thank you. Just starting up but in the UK. So not sure about licenses

    • Hi Suzy,

      Could you let me know which company I should reach to discuss insurance policies ? I am working in a start up tour company in Edinburgh and it would be great to get some tips from you.

  • My question is do I need coverage if my tours take place outside of the U.S.and my third party contractors all have coverage for their own business already?

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3 types of insurance all tour operators need

, , ,

3 types of insurance all tour operators need

As a tour operator you’ll be dealing with risk on a daily basis. On top of the typical risks that a business will face, you have the additional risks that come with your industry. For example, what happens if you have to cancel your tours due to weather or insufficient numbers? What if your licence and permit fees and conditions change unexpectedly? What if a customer gets hurt while on your tour? Here are the 3 types of insurance all tour operators need to manage these risks and protect your business.

1. Assets & revenue

While the specifics will vary depending on the nature of your tour or activity, you need to take all areas into consideration. This refers to things like:

Let’s take a kayaking tour and hire operator as an example. If their premises were to catch fire and the building along with its contents were lost, they would lose money on bookings that would have to be cancelled, rent that still needed to be paid, wages to their staff and all of the other regular expenses they have. A claim will pay for the expenses of the business while they are unable to operate due to an insurable loss.

2. Liability

This type of insurance will free you from responsibility if someone gets hurt or their belongings are stolen while on your tour.

While it is very costly (the standard is $10M), most agents will refuse to resell you unless you have public liability insurance as well as all the relevant permits for business.

Remember that if you work with a third party contractor, you will need to make sure that they have public liability insurance in place as well.

3. People

You are legally required to take out workers compensation insurance for your employees.

In doing so, you’re protecting your business against costly compensation claims as a result of workplace accident or illness.

In Australia, workers compensation has to be taken out for all employees of a Pty Ltd company, including company directors and business owners.

However, business owners aren’t covered by workers compensation if they are a sole trader or a partnership. In this case, you can cover yourself for income protection in the case of accident and illness so you don’t lose revenue while you recover.

Where to look for Tourism Insurance

Without the right level of cover you may be out of pocket after a claim.

Start your search by:

It’s important to find a policy that’s right for your business, so shop around instead of jumping for the first quote you see.

If you enjoyed this article – 3 types of insurance all tour operators need – then follow the Rezdy blog. There are a lot of marketing tools and resources designed with businesses like yours in mind.

Start your free demo or trial of Rezdy today.

Image credit: Catrin Johnson