Booking agents’ duty of care when engaging third-party providers


Over the past 12 months, there have been a handful of landmark cases related to the travel and tourism sector that have all had a significant impact on the insurance market.

The devastating bus crash in the Hunter Valley and the tragic helicopter incident near Sea World on the Gold Coast made headlines around the world and continue to serve as a stark reminder about the responsibilities travel and tourism operators have when they are engaging third parties to provide services.

“When you are arranging travel or events for clients, you owe them a duty of care and may share some responsibility for the supplier, even though you’re not necessarily delivering those services yourself,” says Michael Truong, Senior Account Executive at Gow-Gates.

“If an incident were to occur, and you haven’t undertaken research and implemented risk management measures concerning the businesses you’re engaging to provide services, there could be some exposure to your business.”

Understanding your risk exposure

Of course, insurance is a last line of defence, and that must be accompanied by a thorough understanding of what you’re legally responsible for and the implementation of a strong risk management strategy.

It is important to conduct thorough research into any company you’re engaging to provide services and to understand their approach to safety and risk management.

“If an event did occur, one of the questions that would be asked is why you recommended this company and if adequate checks were taken to ensure that they are insured,” says Truong. “And, if you can’t demonstrate that, there could be some liability against you.”

“For any supplier you’re dealing with, you should have evidence of a valid public liability policy (a Certificate of Currency) that has limits that are in line with the potential risk,” says Truong.

“It doesn’t matter if they’re a new supplier or an existing one, if they’re well established and reputable, or they’re new to the market – if you find out they don’t have relevant and current insurance, there’s a strong argument that you haven’t fulfilled your responsibility and duty as a booking agent.”

In short, by engaging third parties to provide services brings with it some degree of risk. And while it’s impossible to eliminate risk altogether, it can and should be managed. If it turns out that you did not manage this appropriately, you could well be facing a claim of your own.

At Gow-Gates, we work with you to identify the risks your business faces, and help you put safeguards in place to manage them.

Speak to our team today to find out how we can help.

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