Safeguarding your business and reputation through timely insurance engagement in health and safety crises

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Why tour operators and travel agents should involve their insurer sooner rather than later

When you're running a travel business, customer complaints come with the territory. Most are resolved quickly, without much fuss. But what happens when a small issue turns into something bigger and legal?

In this article, we explore why even minor complaints should be flagged to your insurer early, and how a proactive approach can protect your business, reputation, and bottom line.

Every complaint deserves a second look

Here’s the mindset shift: every customer expression of dis-satisfaction is a potential claim.

When a concern arises, ask yourself:

  • Is this a routine query that your team handles daily?
  • Or could it be something that, with a bit of friction or miscommunication, escalates into a legal dispute?

Even complaints that appear minor like dissatisfaction with a hotel room or service can become claims if they're mishandled or left unresolved. That’s why if you believe the issue has a chance of not being resolvable, flagging the issue to your insurance broker early is essential. If in doubt, then your insurance broker can provide further guidance.

 

What does your insurance actually cover?

Travel businesses typically have two critical types of liability cover. Understanding the difference is key:

1. Public Liability

This protects you if a customer suffers injury, illness, death, or property damage due to a failing on your part. Most companies are good at flagging these serious events to their insurer.

2. Professional Indemnity / Errors & Omissions Insurance

This part of your liability policy covers your legal defence costs and any compensation awarded, where an error or omission in your service leads to a financial loss or dissatisfaction from a customer. This could include situations where a customer believes they were misinformed or mis-sold a component of the trip, or where something was unintentionally left out of the booking process.

Importantly, you don’t necessarily need to have made a mistake for the cover to be triggered. Many claims begin when a customer simply believes something went wrong and wants their money back. The policy can support you in de-escalating the issue before it turns legal, including help with drafting formal responses that clarify your position and may satisfy the customer before things escalate.

However, it’s important to note that Professional Indemnity does not cover every instance where you might be liable under The Package Travel and Linked Travel Arrangements Regulations 2018 (PTRs). There are situations where you could be legally responsible, such as missed connections caused by unforeseen events, even if there was no fault or omission on your part. These types of claims may fall outside the scope of a Professional Indemnity policy.

Always check the scope and limitations of your own policy wording and speak to your broker for guidance on how cover applies to your specific circumstances.

 Important note: This also applies to complaints where the customer wants money back due to dissatisfaction under the Package Travel Regulations. However, insurers can’t help with credit card chargebacks. Those are handled by your merchant services provider.

 

Will early notification affect my premium?

In short: Not usually.

Most leading insurers won’t penalise you just for notifying them of a potential issue. Still, it's smart to confirm this with your broker. Early notification can often prevent a claim from happening altogether and that benefits everyone.

 

A real-life example: when a minor complaint escalates

Let’s say a customer emails you after their trip. They weren’t happy with the room cleanliness or how local staff treated them. It seems simple; you apologise, maybe offer a goodwill gesture, and move on.

But what if the customer doesn’t let it go? Maybe your team didn’t respond promptly. Maybe they used language that didn’t land well. Suddenly, this is dragging on. Emotions rise. Months later, you receive a legal letter.

If your insurer hadn’t been informed earlier, your policy’s claims notification condition might not be met and that could put your cover at risk.

 

Why timely notification protects you

Almost every insurance policy includes a General Condition requiring you to notify insurers of any incident that could lead to a claim. Doing so allows your insurer to:

  • Provide guidance on how to respond professionally and strategically
  • Draft correspondence to help de-escalate tensions
  • Speak the right language with suppliers or third parties on your behalf
  • Offer legal support if it’s needed later

Insurers often have access to in-house counsel or industry-specialist legal firms like Kennedys. Why not use that expertise?

 

What action can you take today?

Here’s how to build this into your day-to-day operations:

1. Train your team to recognise complaints early

Customers don’t always use the word “complaint.” They say things like:

  • "I’m very disappointed..."
  • "This isn’t what I paid for..."
  • "I expect a refund..."

Ensure your team knows what to look for, and when to escalate.

2. Create a complaint notification protocol

Talk to your broker about setting up a regular (ideally monthly, possibly quarterly) submission of complaints to your insurer as notifications only. These don’t become claims unless they escalate, but they keep you protected under the policy’s conditions.

3. Use your insurance as a support tool

Your insurer isn’t just there for big claims. They can provide:

  • Templates for complaint responses
  • Advice on tone and language
  • Supplier communication support

This is especially valuable for smaller businesses that may not have in-house legal or customer service dispute resolution experience.

 

Final thoughts: make complaint resolution second nature

In travel, people are at the heart of everything we do. That means emotions are involved on both sides. When something goes wrong, it's not just about facts and timelines; it's about feelings and perceptions.

By training your team, involving your insurer early, and creating a culture of proactive risk management, you turn a potential problem into a professional response. And in doing so, you protect your business, your brand, and your customers' trust.

 

Need help setting up a notification protocol or want to review your policy terms?
Start by speaking to your broker they’re your first port of call in making sure your processes align with your insurer's expectations.

Find out more about Cork Bays & Fisher here.