The Risks Travel Agents Don’t See Coming: Is Your Insurance Keeping Pace?

TL;DR: You built your travel business to create experiences, not to navigate lawsuits, customer injuries, supplier failures, cyber incidents or allegations that your advice caused loss. Yet as a travel business evolves, its insurance may no longer keep pace, and the gaps often only surface at claim time. The most common hidden risks are rising claims, an evolving service offering (such as hosting or escorting tours), supplier and cyber exposures, and cover written for a smaller or simpler business. Reviewing the program against how the business actually operates is how those gaps get found first.

Why do travel agents face risks they never see coming?

The risks travel agents don’t see coming usually grow out of the business itself changing faster than its insurance. A policy written for how an agency operated two years ago can quietly fall behind as the business adds services, takes on more groups, increases in revenue or employee count or contractor count, handles more client money or holds more data, none of which may immediately feel like a risk decision at the time.

The result is a mismatch between what the business now does and what its previous cover was designed for. Most agents assume their insurance automatically covers all aspects of their operations; the exposure appears when a claim tests an assumption that was never true. According to the Australian Travel Industry Association (ATIA, 2 May 2025), around 92% of accredited members are small businesses, the operators least likely to have specialist risk teams revisiting cover as the business shifts. (Industry figures are time-sensitive.)

Gow-Gates has advised travel agents and tour operators for many years through its travel agents and tour operators practice. The suitability of any product depends on each business’s circumstances and the relevant Target Market Determination.

What risks do travel agents most often overlook?

The overlooked risks tend to be the ones outside the day-to-day booking role, the exposures a travel agent carries without thinking of them as “insurance” problems. The most common are:

• Advice and professional liability, allegations that advice, a booking or an itinerary caused a client financial loss, which is the core of professional indemnity cover.
• Customer injury, a third party injured in the office, at an event, or during an activity the agent is involved in, a public liability exposure.
• Supplier and airline failure, money paid to a supplier that collapses, and the client fallout that follows.
• Cyber incidents, a data breach or payment fraud affecting the customer information and money an agency holds.
• Overseas incidents, a medical emergency or injury on a trip the agent is connected to, which may increase the travel business's legal responsibilities where it is hosting or accompanying travellers.

Any one of these can turn into a claim, and several sit partly or wholly outside a standard travel agent arrangement. The pillar guide sets out how the business-protection covers fit together: Travel business protection: what risks should you cover?.

How does hosting or escorting tours change your risk?

Hosting or escorting tours is one of the clearest ways an agent’s risk profile shifts without the cover following. Many agents now do more than book travel, they host client groups, escort tours overseas, act as tour leaders, coordinate activities on the ground or run special-interest departures. The moment an agent steps onto a plane with their clients, they have stepped into a different risk profile.

What the agent sees as exceptional customer service, an insurer may see as tour operation risk, a classification that standard travel agent cover may not extend to depending on the insurer and policy wording. You may refer to the tour operator insurance for more information.

Why are claims rising for travel businesses?

Claims activity has been a growing area of attention because the conditions around travel have all shifted at once. Higher travel volumes, changing regulations, evolving traveller expectations and heightened scrutiny following recent disruptions have combined to make disputes and claims more likely across the sector.

A missed connection, an injury during a hosted activity, a supplier failure, an allegation of inadequate advice, a medical emergency overseas, each can become a claim. Crucially, the cost is not limited to claims that succeed: even when an agent has done nothing wrong, they still need to defend a claim and this can be expensive with appointing investigations, appointing lawyers, and the like.

Could your current insurance leave you exposed?

It certainly can. A standard travel agent arrangement is generally built around advice and office risk, so as an agency adds hosting, handles more client money, or holds more data, some exposures can fall outside the cover it holds depending on how the policy is structured. Without the right cover in place, a claim can reveal gaps the business never knew existed.

Whether any particular situation is covered depends on the policy wording and on what was disclosed to the insurer, which is why assumptions are the real danger. The two liability pillars explain where the standard cover starts and stops: What is travel agent insurance? and Tour operator insurance: what cover does your business need?.

How can you tell if you’ve outgrown your cover?

A short self-assessment is a useful first check. It is worth understanding your exposures more closely, and reviewing your insurance program, if any of the following apply:

• Do you accompany travellers on trips or host group departures?
• Do you run themed, educational, sporting or special-interest tours?
• Do your staff provide support or supervision while travelling?
• Do you hold significant customer data or handle client and supplier payments?
• Have your insurance arrangements been reviewed in the last 12 months?

A “yes” to any of these does not automatically mean a gap exists, but it is a signal that the business has activities or exposures worth checking against its current cover rather than assuming they are included.

How should travel agents keep their cover in step with the business?

The practical answer is to treat insurance as something that evolves with the business, not a set-and-forget purchase, and to review it against what the business actually does today. Before relying on a policy, useful questions to ask include:

• Have all current activities, including hosting and escorting, been disclosed to the insurer?
• Do the liability sections extend to how the business now operates?
• Are supplier-failure, cyber and property exposures addressed, not just liability?
• Does cover apply in the destinations and for the activities involved?
• When was the whole program last reviewed against the current business?

A structured review generally serves a travel business better than assuming an existing policy keeps pace, because the exposure changes as the business does. Gow-Gates can assist travel businesses to review their exposures, consider available insurance options and determine whether existing arrangements remain appropriate having regard to their circumstances. A booking-only agency and an agency hosting regular departures need very different programs.

Key takeaways

• The risks travel agents don’t see coming usually come from the business evolving faster than its insurance, leaving gaps that only surface at claim time.
• The most overlooked exposures are advice/professional liability, customer injury, supplier and airline failure, cyber incidents and overseas incidents.
• Hosting or escorting tours is a common trigger, what an agent sees as service, an insurer may classify as tour operation.
• Claims activity has risen with higher volumes, changing regulations and greater scrutiny, and defending a claim is costly even when the agent is not at fault.
• Cover can lag behind an evolving business; what any policy pays depends on the wording and what was disclosed.

Frequently asked questions

What risks do travel agents most often overlook?

Travel agents most often overlook exposures outside the booking role: allegations that their advice caused financial loss, customer injuries, supplier or airline failure, cyber incidents affecting customer data and payments, and incidents on trips overseas. Several can sit partly outside a standard travel agent arrangement. Whether any is covered depends on the policy wording and what was disclosed to the insurer.

Can a travel agency outgrow its insurance?

Yes. A policy written for how an agency once operated can fall behind as the business adds services, hosts tours, handles more client money or holds more data. Those changes rarely feel like insurance decisions, so cover can quietly lag the business. Reviewing the program against current activities is how that gap is identified before a claim.

Why are claims against travel businesses increasing?

Claims activity has grown as higher travel volumes, changing regulations, evolving traveller expectations and greater scrutiny following recent disruptions have combined. Missed connections, injuries on hosted activities, supplier failures, advice allegations and overseas emergencies can all become claims. Even unsuccessful claims are costly to defend, which is why adequate, well-matched cover matters.

Does standard travel agent insurance cover everything my agency does?

Not necessarily. A standard travel agent arrangement is generally built around advice and office risk, so activities such as hosting tours, or exposures like cyber and supplier failure, may fall outside it. Whether something is covered depends on the policy wording and on what was disclosed to the insurer, so assumptions should be checked rather than relied on.

How often should a travel agent review their insurance?

A yearly review is a sensible baseline, and any material change in the business, new services, hosting tours, more client data or money handled, is a reason to review sooner. Cover written for a smaller or simpler business may not keep pace, so reviewing the program against current activities helps surface gaps before a claim does.

About the author

This article was prepared by the Travel & Tourism practice at Gow-Gates Insurance Brokers Pty Ltd (ABN 12 000 837 785, AFSL 245432), an independently owned Australian insurance broking and risk advisory firm operating for more than 60 years. Gow-Gates advises travel agents and tour operators on structuring insurance programs and advocating at claim time, and is a member of Steadfast, NIBA and AFCA.

Sources

1. Australian Travel Industry Association (ATIA). “Golden Age of Travel Agents” media release, 2 May 2025. https://newshub.medianet.com.au/2025/05/golden-age-of-travel-agents-industry-hits-back-at-misleading-kpmg-report/99465/
2. Australian Travel Industry Association (ATIA). “About ATIA Accreditation.” https://atia.travel/Accreditation
3. Gow-Gates Insurance Brokers. “Travel Agents and Tour Operators.” https://www.gowgates.com.au/industries/travel-agents-and-tour-operators

Disclaimer: This content contains general information only and does not take into account your personal objectives, financial situation or needs. You should consider how appropriate any information is to your own objectives, financial situation and needs before acting on it. Gow-Gates makes no representation or warranty concerning the application of policy wordings. For full details of the terms, conditions and limitations of cover, refer to the specific policy wordings and/or Product Disclosure Statements, the relevant Target Market Determination, and the Gow-Gates Financial Services Guide. Gow-Gates Insurance Brokers Pty Ltd arranges insurance and is not the insurer. © Gow-Gates, 2022–2026.

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