Q:Could my agency be liable
to a client who purchases trip cancellation insurance based on my
travel agents mistaken assurance that the insurance would cover
cancellation due to a particular medical condition? If so, how can
we prevent such liability, given that our agents describe insurance
coverage many times each day?
Trip cancellation insurance has become so complicated that there is
no way that the average travel agent can memorize everything that
is and isnt covered. Nor can the average agent really understand
the insurance policy itself, which is written in legalese, even
assuming that the agent has access to the policy.
For example, one
policy that I recently read has 37 coverages, which are problems or
occurrences before or during the trip, and 18 exclusions, which are
similar-sounding problems or occurrences that arent covered. To top
it off, the policy has 34 definitions, many of which are quite
lengthy and not intuitive.
Just one of the 18
exclusions is for pre-existing medical conditions. That definition
has well over 100 words, and the conditions for waiver thereof take
up another 150 words.
Even if your travel
agent has a genius-level IQ, there is just no way he or she could
advise clients correctly day in and day out.
Your agency is
liable for the consequences of your agents malpractice, which means
negligence committed by a professional. However, not every mistake
constitutes negligence, which occurs only when the conduct (such as
the agents advice about insurance) is below the standard of
practice in the community. To prove what that standard is, the
plaintiff needs either a precedent or an expert witness.
There are no
precedents in any state. So, could the plaintiff find an expert who
would testify that the standard of practice in your community (or
any community, for that matter) is to advise customers correctly
all the time about trip cancellation insurance coverage? I doubt
Therefore, I do not
believe that your agency would ever be held liable for such
Even if the
plaintiff could prove that your advice was negligent, you would
still win unless the plaintiff also proved that he relied on your
advice in deciding whether to pay for the trip.
Even then, you
might still be able to win if you could prove that the client was
negligent in failing to read the policy after it arrived in the
However, judges in
small claims and similar courts do not always decide cases
according to the law. Rather, they often dispense rough-and-ready
justice based on which party can more easily suffer a loss.
Therefore, you need to focus on how to stay out of court in the
The best way is to
require your agents to refrain from answering coverage questions.
If they are asked a question, have them simply hand out the
insurance brokers marketing materials. Then, in the leisure travel
disclaimer that you ask clients to sign, add a sentence such as
Client acknowledges that Agency has not made any representations
about what conditions or occurrences trip cancellation insurance
If your agents cant
refrain from providing insurance advice, then make sure that the
client signs a disclaimer that has a sentence such as Client
acknowledges that the terms of any trip cancellation policy
supersede any advice given by Agency about what the policy may
is a Fairfax, Va.-based attorney specializing in travel law. He
answers your questions in the TravelWeekly.com Legal Ease forum. To contact Pestronk
directly, e-mail him at[email protected].