If you love to travel and have a knack for organizing and helping people, then owning a travel agency might be a great option for you. It means learning about exciting new places and making the dreams of others come true. Plus, you may be able to score some discounts for yourself when you want to go on adventures.
However, just like running any other business, owning a travel agency isn’t all fun and games. It’s a lot of work, and you need to love what you do to make it successful. Besides helping with travel arrangements, you need to do everything else involved in running a business. One of the things you can’t overlook is having the right insurance. If you don’t, then you could find your business in deep financial trouble if something were to happen. Even if it doesn’t, you might find that you are spending sleepless nights worrying about issues that could be rectified or mitigated if you had coverage in the first place. Here’s all the insurance you might need when running a travel agency.
Every business should have general liability insurance, regardless of type or size. General liability will protect you against the costs of someone bringing a lawsuit against you. There are many reasons why someone could make a claim. For example, a customer could come onto your property and slip on some ice. Or, you could be the victim of a cyber attack, and client data could be exposed. Whatever the reason, lawsuits cost money. Even if you did nothing wrong, you would have to hire lawyers and witnesses and spend on legal and court fees. Liability coverage can compensate you for these costs, so you don’t have to pay out of pocket.
Commercial property insurance will protect your business property from repair and replacement costs. This includes the land, building, and equipment that you have. Don't think that you have coverage through your personal policy if you work from home. It will not cover damage to work-related property, and it might not even cover the space in the home that you use primarily for work. Check your policy and get the right coverage. You don’t want to learn that you aren’t protected after something bad has already happened.
If you have employees, then you will have to have workers’ compensation coverage. It’s not just the law, but it is also the ethical thing to do. Workers’ compensation gives compensation to an employee who has been injured or gotten ill at work and has to miss time. It will help with medical bills, rehabilitation costs, lost wages, and anything else that has arisen due to the injury. It also protects you from paying for these out of your pocket. You might think that your workplace is very safe, and travel agencies certainly are. However, there is always a chance that someone could get injured. Plus, employees can suffer repetitive stress injuries such as from typing or sitting at a computer. So it’s always better to be safe than sorry.
Professional liability insurance, also known as errors and omissions insurance, is a must-have for any service-based business. As the name would suggest, it provides coverage for businesses if they make a mistake that causes harm to a client. For example, you are providing the service of travel advice and helping with booking that travel. Something could go wrong on the trip. The client might claim that they were booked in an unsafe neighborhood without warning, leading to a theft. Or, the hotel might not have the right booking information, and the client ends up having to switch places to stay, leading to extra costs. In all these cases, you can be protected with professional liability insurance.
Let’s say a fire rips through your building and destroys all of your computers and offices. Yes, commercial property coverage will protect you from the costs of repairing and replacing everything that was lost. However, what about the costs of not being able to run your business until everything is back in order? That’s where business interruption comes into play. When your business has to close temporarily for a protected reason, this coverage will ensure that you can still pay the bills. This means your utilities, rent or mortgage, lost revenues, and salaries. Then, when you can go back to work, you can hit the ground running with your retained employees and as little financial disruption as possible.
There are situations when a travel agency might need a vehicle. Just like with your personal car and policy, you will need special coverage if you use a car for your business. Using your personal vehicle, you can’t assume that your policy will provide protection. If you deliver supplies, drop clients off at the airport, or do anything work-related, then your coverage might not apply. Make sure you fully understand your policy before deciding whether to purchase commercial auto insurance. Just like with property insurance, you don’t want to be left holding the bag if something bad happens.
Having the right coverage means having a security blanket in case anything goes wrong. It won’t prevent bad things, but it will help lessen the financial blow from negative situations. Insurance is an important investment, and you want to make sure that you are getting the most bang for your buck. Always compare commercial insurance policies to make sure that you are getting a reasonable price for the coverage you need. Plus, you want to ensure that you are properly covered. Not all policies are created equal between providers.
The worst thing is finding out you don’t have coverage when needed. A lawsuit can be devastating to a small business, and you don't even have to have done something wrong for someone to sue you. There is a financial toll, and there is also the stress of having a claim hanging over your head for potentially years to come. Don't take chances. Make sure that you have the right coverage for your travel agency.