The UAE is renowned for its tourist attractions, and licensed tourist agencies are required to have tour operators’ liability insurance. This specialised insurance protects tour operators and travel agencies from liabilities such as personal injuries, property damage, or other incidents during their operations. It’s essential to avoid key mistakes when purchasing this insurance to ensure comprehensive, cost-effective coverage that adequately protects the business.

From underestimating coverage needs to overlooking the cancellation of coverage, this blog explores the key mistakes policyholders make while purchasing operators’ liability insurance.

Top Mistakes to Avoid When Purchasing Tour Operators Liability Insurance in the UAE

1. Underestimating Coverage Needs

Many tour operators underestimate their coverage needs, thinking basic insurance is sufficient. However, risks like business disruptions, property damage, and third-party injuries can result in significant liabilities. Operators should evaluate all aspects of their operations—such as adventure activities, transportation, and accommodations—and adjust their coverage to fully protect their business.

2. Not Understanding the Policy Details

Tour operators often overlook fine print regarding exclusions, conditions, or limitations on coverage in the policies. They must fully understand what’s included and what isn’t.

Some of the common exclusions are as follows: 

• Natural disaster
• Pre-existing conditions
• Act of terrorism or war
• Theft or loss of personal belongings
• High-risk area packages
•  extreme sports 
• off-the-beaten-path excursions

3. Unfamiliar Claims-Made Policies

A claims-made policy only covers claims filed within the policy period, as specified in the terms and conditions, like with the operator’s liability insurance. In contrast, an occurrence-based policy covers claims made after the policy period, as long as the damage occurred during it, such as in a professional indemnity policy.

4. Focusing Only on Price:

While staying within budget is important, focusing solely on the price of the premium without considering the quality of the coverage can be detrimental. The prices vary according to the risks involved in the travel destinations, the agency’s strength, geographical reach, regulatory requirements, and so forth. Cheaper policies leave gaps in coverage, which could ultimately result in financial loss. It is crucial to balance costs with sufficient protection. 

5. Ignoring Legal and Regulatory Requirements:

The UAE has specific laws and regulations governing the travel and tourism industry, including mandatory insurance requirements for tour operators. Ignoring these legal obligations could not only expose the business to significant financial risk but also to potential fines or penalties. Always verify that policy aligns with local laws and regulations.

6. Not Including Employee Coverage

If the employees are involved in providing tours or related activities, it’s essential to include employee liability and worker’s compensation coverage in the policy. Failing to do so could lead to significant costs if an employee is injured or harmed while on duty.

7. Ignoring Professional Liability Insurance

Some tour operators overlook the importance of professional liability insurance, also known as errors and omissions insurance. This coverage is vital for protecting against claims arising from mistakes or misrepresentations made during the planning or execution of tours, such as booking errors or failing to provide promised services

8. Failing to Implement Risk Management Measures

Insurance is essential, but it should complement effective risk management practices. Not addressing underlying risks—like safety protocols, vehicle maintenance, or staff training—could lead to preventable claims. Tour operators should actively implement preventive measures and show their insurers they are minimising risk.

10. Not Considering Reputation and Reviews

When choosing an insurance provider, it’s essential to consider more than just price and coverage. The insurer’s reputation matters—check their history of timely claims processing and customer support. Research online reviews or ask fellow tour operators about their experiences. Ensure the provider has financial stability, industry expertise and understands the unique risks faced by tour operators. Look for insurers with strong ratings and a proven track record.

11. Overlooking Cancellation Coverage

Cancellation is a common issue in the travel industry, particularly due to unexpected events like natural disasters, political unrest, or pandemics. Make sure the insurance covers trip cancellations, particularly for clients and operations, as this can help protect the business from lost revenue or reputational damage.

CoverB: Your Insurance Provider: 

CoverB is a leading insurance provider in the UAE, offering comprehensive coverage and expert consultations. Known for its transparency in policy agreements, claim processing, and premiums, CoverB has earned trust in the industry. It provides complete protection for your business with additional services and seamless claims approval, enhancing financial security and stability. Ensure your business is protected with the right tour liability insurance.

Final Note 

Having tour operators’ liability insurance is not just a legal requirement; it is also a vital component of risk management for any tour operator. The potential costs associated with claims can be substantial, and without adequate coverage, a business could face significant financial strain or even bankruptcy due to unexpected legal actions.

Connect with experts at CoverB today for tailored insurance service for all your needs!