A proactive approach to risk mitigation
Since 1970, the Irish Travel Agents Association (ITAA) brings together approximately 100 member companies and provides a space for travel agents to understand the industry and associated legal requirements.
In our ongoing commitment to enhancing insurance availability for travel agents and tour operators in Ireland, we embarked on a transformative journey in partnership with Nationwide Broker Services (NBS). Our objective was clear: To provide a comprehensive insurance scheme for members of the Irish Travel Agents Association.
Through a meticulous review of historical claims, we identified critical issues in claims handling that were not only resulting in substantial legal costs for Irish travel agents but also posing challenges to the industry's overall sustainability.
The Challenge
The ITAA found that EU Legislation and extensive legal costs created major concerns when it came to insurance claims from tourists. One of the key challenges faced by Irish travel agents was their inclusion in claims brought forth by clients pursuant to EU legislation aimed at protecting tourists' rights.
In many instances, claims originated from hotels or tour operators, but travel agents found themselves drawn into the legal proceedings. This scenario was not only legally complex but also financially burdensome, leading to soaring legal fees.
Recognizing the need for proactive risk mitigation, we set out to formulate strategies that would safeguard the interests of travel agents, ultimately reducing legal costs and ensuring a smoother claims process.
The Solution
Through an extensive investigation of historical insurance claims, we developed a proactive risk mitigation approach focusing on indemnification and establishing a comprehensive insurance database while protecting tourists’ rights as required by EU legislation. The EU legislation that played a pivotal role in this case study is the "Package Travel and Linked Travel Arrangements Regulations 2018." This legislation enforces the protection of tourists' rights and their ability to bring claims against travel agents and tour operators.
We incorporated a mandatory requirement for all service providers working with travel agents to sign agreements providing indemnity in the event of a client injury during their care. Additionally, we advised travel agents to establish a comprehensive database of insurance details for service providers. This included tracking the expiry dates of contracts with service providers in foreign jurisdictions.
The proactive approach implemented in this case study bore fruit. Despite incidents occurring, all clients of the scheme were able to rely on the indemnities established. This resulted in the resolution of all claims without resorting to expensive cross-jurisdictional litigation, which had previously been the norm.
Additionally, ITAA experienced a substantial reduction in legal costs for travel agents and associated parties, streamlined the claims handling process which ensured quicker resolution and strengthened partnerships between travel agents, insurers, and service providers.
By anticipating challenges, addressing legal complexities and leveraging EU legislation, we have not only reduced financial burdens but also strengthened the travel industry's foundation through a proactive risk mitigation approach.
Our commitment to providing innovative insurance solutions continues to benefit travel agents, tour operators, MGAs, and insurers alike.
“This newfound knowledge helped PALI members to place their business orders with Arachas as a group.”
